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Rising ticket prices and booming demand helped Ryanair post record profits at the start of summer, but the low-cost carrier was forced to slash passenger expectations due to delayed Boeing deliveries and warned of an uncertain winter ahead.
Ryanair on Monday reported after-tax profit of 663 million euros for the three months to the end of June, nearly four times what it was in the previous year and well above the previous quarter’s record of 397 million euros in 2017.
UK-listed low-cost airline EasyJet has followed record profits, as airlines benefit from strong demand and passengers’ willingness to pay higher fares despite a weak European economy.
Ryanair said its year-over-year comparisons in the first quarter were boosted by a strong Easter and bank holiday extra in the UK, as well as poor performance in 2022 due to Russia’s invasion of Ukraine.
Revenue increased by 40 percent to 3.65 billion euros in the period, which offset a 23 percent increase in costs, thanks to higher fuel and staff bills.
Average airfares rose 42 percent year-on-year to €49, but Ryanair reported a “softening” in fares people booked close to when they traveled in late June and July. It expected it to facilitate price increases to “low double digits” in the current quarter.
CEO Michael O’Leary said the airline had little visibility into travel demand as winter approaches, but added: “Consumers may need some price stimulus . . . after months of rising mortgage rates and consumer price inflation.”
Ryanair bought 300 short-haul jets in a $40 billion deal with Boeing earlier this year, and has laid out ambitious plans to increase passenger numbers by more than a third to 300 million annually by 2034.
But on Monday, the company was forced to slightly cut its passenger forecast for the fiscal year from 185 million to 183.5 million, which it blamed on expected delays in plane deliveries from Boeing.
Chief Financial Officer Neil Sorahan said the delays weren’t Boeing’s fault, citing a strike in the manufacturer’s supply chain and logistical problems caused by the collapse of a railway bridge used to transport aircraft fuselages.
“I think there is a curse on them, and they seem very unlucky,” Sorahan said.
Surhan added that there had been no impact on bookings from the sweltering heat wave across parts of southern Europe, including wildfires in Greece that forced some airlines to launch emergency repatriation flights.
“Weekend bookings were still very strong,” he said.