THERE are often fireworks when Ryanair updates investors and it was no different today, with its third-quarter results giving plenty for observers to chew over.
The Dublin-based airline, which is Europe’s biggest, narrowed its profit guidance for 2024 as it faces a variety of headwinds, from its battle with online travel agents to the fall-out from the current upheaval in the Middle East.
Analysts cited the removal of Ryanair flights from some OTA sites in early December, amid ongoing claims that such third parties are “scraping” fares from its website and selling them without permission and at higher prices, as significant as the company downgraded its guidance, with one explaining that the activity has forced the airline to lower fares to maintain occupancy.
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However, the company said the removal was welcome and that it had recently struck deals with two OTAs, Love Holidays and Kiwi, allowing their customers to book flights directly on the airline’s website without inflating prices for seats or ancillary products.
Battles with OTAs are not the limit of the challenges currently facing Ryanair, though. Like the rest of the aviation industry, it has faced a rise in fuel prices amid the strife in the Middle East that has come in the wake of the Israel-Hamas conflict. Given the war in Ukraine is also continuing to rumble on, there is no immediate prospect of oil and gas prices moving in the other direction to any significant extent soon.
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Ryanair meanwhile raised the prospect of further delays in receiving the new, more fuel-efficient aircraft from Boeing, it has ordered, which may hinder its efficiency aspirations at least for a short while.
All that said, the underlying demand for air travel continues to be strong and showing no signs of easing. Passenger numbers were up 7% on the third quarter of the previous year at 41.4 million and revenue was 17% higher at €2.7 billion, albeit that came as operating costs increased by 26% to €2.72bn.
Ryanair may have trimmed its profit guidance marginally today, but at a new range of €1.85bn to €1.95bn they are still on course to be higher than the record after-tax profits of €1.45bn it generated in 2018.
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