Ryanair Holdings has reported a net loss of €355m for the year to Mach 2022 as the airline recovers from the impact of Covid travel restrictions.

Customer numbers improved by 250% to 97 million for the full year while revenue tripled to €4.8bn.

The airline’s average fares in FY22 decreased by 27% to just €27, while ancillary revenue generated €22 per passenger.

Lower costs, coupled with rising load factors, saw FY22 (ex-fuel) unit cost per passenger reduce to €35. 

Year-end net debt fell to €1.45bn (prior year €2.28bn), and group chief executive Michael O’Leary said the company plans to reduce this net debt to zero over the next two years.

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“The strength of Ryanair’s balance sheet ensures that the group is well poised to capitalise rapidly on the many growth opportunities that exist in Europe into the post Covid-19 recovery this year and beyond,” he added.

According to O’Leary, while bookings have improved in recent weeks, the booking curve remains much closer-in than was typical pre-Covid.

“The impact of the Omicron variant and Russia’s invasion of Ukraine means that Q1 pricing continues to need stimulation.” O’Leary explained.

“However, there is pent-up demand and we are cautiously optimistic that peak summer 2022 fares will be somewhat ahead of peak pre-Covid levels.”

O’Leary reiterated the airline’s ambition to grow FY23 traffic to 165m, up from 97m in FY22 and 149m pre-Covid, and will pursue its load active, yield passive strategy to achieve this growth. 

While 80% of Ryanair’s fuel requirements are hedged well below current spot prices of over $100bbl, the unhedged 20% will give rise to some unbudgeted cost increases, he cautioned investors.

O’Leary signalled that despite limited H1 visibility and almost zero H2 visibility, Ryanair hopes to return to reasonable profitability in the financial year to March 2023.

The airline’s CEO referenced emergence of the Omicron variant pre-Christmas and the Russian invasion of Ukraine in Febbruary, both of which immediately damaged close-in bookings and yields for the Christmas and Easter peak travel periods.

“Given the continuing risk of adverse news flows on both these topics, it is impractical if not impossible to provide a sensible or accurate profit guidance range at this time,” he stated.

Broker Davy commented: “We see a sharp recovery but fuel prices will partly offset this and consensus will likely come back modestly - we assume in the single-digits. Still, Ryanair is best placed from a market share, growth, balance sheet, cost and hedging position to offset headwinds and thrive in even a recessionary, environment. We have a €19 price target.”