Ryanair’s Q1 profit drops 46% despite traffic growth amid lower air fares

Ryanair Holdings plc reported a 46% drop in Q1 profit to €360 million, compared to €663 million in the prior year. Despite a 10% increase in passenger traffic to 55.5 million, average fares fell by 15%, contributing to the decline in profits.

Key Q1 Highlights:

• Passenger Traffic: Increased by 10% to 55.5 million.
• Load Factor: Slight decrease from 95% to 94%.
• Average Fare: Dropped from €49.07 to €41.93.
• Revenue: Slight decline from €3.65 billion to €3.63 billion.
• Operating Costs: Rose by 11% to €3.26 billion.
• Profit After Tax (PAT): Dropped 46% to €360 million.

Strategic and Operational Developments:

• Fleet Expansion: Currently operating 156 Boeing 737 MAX 8-200 with plans to increase this number despite Boeing delivery delays.
• Record Summer Schedule: Launched with over 200 new routes and five new bases.
• Fuel Hedging: 75% of FY25 fuel needs hedged at under $80 per barrel, saving over €450 million.
• Share Buyback: Over 50% of a €700 million share buyback program completed.

Environmental Initiatives:

• Sustainable Practices: Received top ESG ratings and continued investments in Sustainable Aviation Fuels (SAF) and new aircraft technologies to reduce fuel burn and CO2 emissions.

Future Outlook:

• Traffic Growth: Expected to grow by 8% to reach 200 million passengers in FY25.
• Unit Costs: Anticipated to rise modestly, offset by fuel hedge savings.
• Pricing Trends: Q2 fares are expected to be lower than last summer, with Q3 and Q4 visibility currently low.
• Challenges: Potential adverse developments include conflicts, ATC staffing issues, and further Boeing delivery delays.

CEO Michael O’Leary emphasised the importance of addressing European ATC capacity issues and highlighted Ryanair’s strong balance sheet and competitive cost advantages as key factors supporting future growth.