The airline sector climbed on the stock market on Monday after Ryanair RYA.I said it expected a record annual profit this year, alleviating investors’ concerns about a possible drop in prices over the winter.
The European transport and leisure compartment .SXTP gained 0.91% at 08:55 GMT, supported by a jump of 6.02% for Ryanair shares. In its wake, Air France-KLM AIRF.PA gained 2.31%, Easyjet EZJ.L 3.83% and IAG ICAG.L 1.16%.
Europe’s largest airline by passenger numbers said it expected an after-tax profit of between 1.85 billion and 2.05 billion euros for the year to the end of March, well surpassing its previous record of 1.45 billion euros in 2018.
For the third quarter, which runs from October to December, Ryanair expects average fares to be higher than the third quarter of the previous year by around 15% (“mid teens”).
Losing pricing power during winter is one of the biggest concerns for investors in the travel sector.
“Given concerns about a possible decline in demand, the positive comments for the third quarter support the sector as a whole,” commented James Goodall, analyst at Redburn.
“Ryanair’s results for the first half of the year were excellent and the company announced strong growth in demand and prices for the winter and next summer,” he added.
(Written by Kate Entringer, with Olivier Sorgho, edited by Blandine Hénault)