BUDGET airline Ryanair has swung to a first-quarter profit despite airport disruption but warned the market is fragile as it was claimed “the golden age of cheap air travel is over”.
The Dublin-based carrier said it took a hit from the Russian invasion of Ukraine, and said the full-year outlook is unpredictable.
The Irish airline reported profits after tax of €170 million for the three months to June 30 against net losses of €273m a year ago, as passenger numbers rebounded to 45.5 million,which is nine per cent ahead of pre-Covid levels.
However, profits were still “well below” levels seen in the same quarter before the pandemic in spite of the bounceback, according to the group.
It said the Russian war in Ukraine “badly damaged” Easter bookings and fares, which fell 4% against the same quarter pre-Covid, although average fares for the summer are higher on a three-year basis by a “low double-digit percentage”.
The group also said it is being hampered by “unprecedented” air traffic control and airport handling disruption, but hopes to run “almost 100%” of its scheduled flights and minimise delays.
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Ryanair also warned that rocketing oil prices are set to push up its full-year fuel bill, affecting the 20% of its fuel costs that have not been secured in advance.
It said it is “too soon” to give any guidance on full-year profits, given the uncertain market and with passengers continuing to book at the last minute.
Michael O’Leary, Ryanair chief executive, said: “Our business, our schedules and our customers are being disrupted by unprecedented air traffic control and airport handling delays, but we remain confident that we can operate almost 100% of our scheduled flights, while minimising delays and disruptions for our guests and their families.”
He added: “While we remain hopeful that the high rate of vaccinations in Europe will allow the airline and tourism industry to fully recover and finally put Covid behind us, we cannot ignore the risk of new Covid variants in autumn 2022.
“Our experience with Omicron last November, and the Ukraine invasion in February, shows how fragile the air travel market remains, and the strength of any recovery will be hugely dependent upon there being no adverse or unexpected developments over the remainder of 2022-23.”
Like its rivals, the group has been battling against the threat of strike action from staff over pay, but said it has agreed deals with unions representing more than 80% of its pilots and around 70% of cabin crews.
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“We hope to conclude agreements with the small remaining balance in the near future,” Ryanair added.
Allegra Dawes, senior analyst at global primary research firm Third Bridge, said: “Ryanair is leading its peers in the recovery from Covid and plans to operate its summer 2022 at a capacity 15% higher than 2019 levels.
“Our experts estimate revenue for this summer could be 20% higher than in 2019.
“The international travel recovery remains fragile due to a worldwide pilot shortage and the problem with labour strikes. However, our experts say that Ryanair has been more successful than others in coping with the crisis because it didn’t significantly reduce its workforce during the pandemic.
“The golden age of cheap air travel is over thanks to decade-high oil prices and inflation.
"However, Ryanair's fuel hedging policy means they are better positioned to maintain price competitiveness and under less pressure to increase fares over the next 12 months.”
Shares in Ryanair closed up 5.75p, or 0.54%, at 1,074.5p.
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