Ryanair reports Q1 profits of €663 million

Ryanair Holdings reported strong Q1 profits of €663 million, a significant increase compared to the prior year’s Q1 profits of €170 million, which were affected by Russia’s invasion of Ukraine in Feb. 2022, resulting in damaged traffic and fares. The rise in Q1 profits was attributed to a strong Easter, an extra UK public holiday in May, and weak prior-year comparisons.

During Q1, Ryanair achieved an 11% increase in traffic, reaching 50.4 million passengers with a 95% load factor. Revenue per passenger rose by 27%, driven by a 42% increase in average fares and a 4% increase in ancillary revenue. The company added 119 Boeing 737-8-200 aircraft to its fleet, bringing the total fleet to 558 aircraft by June 30.

Ryanair emphasised its commitment to environmental sustainability, investing in new technology aircraft and signing deals with Repsol and other companies for sustainable aviation fuel (SAF). The company also urged for urgent reform of Europe’s inefficient air traffic control (ATC) system to reduce flight delays and unnecessary CO2 emissions during national ATC strikes.

In terms of growth, Ryanair operated its largest-ever summer schedule, opened new bases and routes, and announced plans to expand operations in Albania. The company anticipates continued growth as European airlines consolidate and capacity remains constrained, enabling Ryanair to extend its market share gains.

The Q1 FY24 Business Review highlighted revenue growth, increased costs primarily due to higher fuel and staff expenses, and a strong balance sheet with over €4.8 billion in gross cash. Ryanair plans to repay debt, fund aircraft capex, and prioritise pay restoration for its employees before considering shareholder returns.

The fleet expansion includes the acquisition of 300 Boeing MAX 10 aircraft, which will enable controlled traffic growth and enhance the company’s unit-cost advantage over competitors. However, there have been delays in Boeing deliveries, impacting expected traffic growth for FY24.

Despite uncertainties related to Boeing deliveries, fuel costs, and consumer spending, Ryanair remains cautiously optimistic that FY24 profits will be modestly ahead of the previous year, but meaningful guidance is not yet available.