Ryanair Reports Annual Profit of Over $2 Billion Thanks to Record Traffic

Low-cost airline Ryanair revealed on Monday that it had posted its best-ever annual profit. Rising passenger numbers and revenues offset a significant increase in operating costs, although the company notes a drop in fares for the current quarter.

Dublin-based Ryanair reported that its after-tax profit for the year to March 2024 climbed 34% to €1.92 billion ($2.09 billion). Sales were up 25% on the previous year, at 13.44 billion euros. The company carried 184 million passengers, 23% more than before the Covid pandemic and 9% more than the previous year.

Yield per passenger also rose for the group (comprising Malta Air, Buzz, Lauda Europe and Ryanair UK), with an average increase of 21%, reaching almost €5 per passenger. Ancillary revenues rose by 12%, averaging €23.40 per passenger. This growth in traffic and fares helped Ryanair overcome a 24% rise in operating costs and a 32% increase in fuel costs.

Ryanair is gearing up for a record summer season with over 500 aircraft, including Boeing 737-800s and 737 MAX-8200s, as well as a fleet of 27 Airbus A320s operated by Lauda Europe. The company plans to open five new bases and add over 200 new routes for the coming summer season.

To protect itself against possible increases in operating costs, Ryanair has hedged more than 70% of its fuel requirements for the current financial year at just under $80 a barrel, which should save around 450 million euros ($488 million).

Ryanair enjoys a competitive advantage thanks to the financing structure of its fleet. It owns all its 556 Boeing aircraft, making it less vulnerable to fluctuations in market lease rates than its competitors. By avoiding high leasing costs, Ryanair was able to pay down €1 billion in debt, while ending the year with around €4.12 billion ($4.42 billion) in gross cash. This strong financial position enables Ryanair to earn substantial interest on this cash, approximately €0.3 per passenger ($0.32), mainly due to high lease rates for its Airbus A320 fleet.

Ryanair also announced a 700-million-euro share buyback program, underlining its robust balance sheet. CFO Neil Sorahan explained that the company's priorities were to restore salaries after Covid, increase compensation, pay down debt and redistribute 700 million euros to shareholders.

Ryanair plans to increase its traffic by 8% in the current year, aiming for between 198 and 200 million passengers by 2024, although this depends on deliveries of Boeing 737 MAX-8200s. At the end of March 2024, Ryanair had 146 of these aircraft in service and expects to receive a further 12 by July 2024. However, this number is 23 units less than the company had hoped for, due to delivery delays from Boeing.

Ryanair also mentioned that travel demand in Europe remains strong for the remainder of 2024, and despite Boeing's delays, it is set for its largest-ever summer program. Meanwhile, some of its competitors are having to ground their A320s for Pratt & Whitney engine repairs, a situation that is likely to continue until 2026 due to manufacturers' supply constraints.

Source : Air Journal