(AOF) – Ryanair Holdings plc today reported net operating profit of 211 million euros for the third quarter, above expectations (200 million), against 88 million euros for the third quarter of the Previous exercice. Strong travel demand in mid-October and the peak of the Christmas/New Year holidays (with no negative impact from Covid or the war in Ukraine) boosted traffic and fares in all low-cost carrier markets.
Ryanair gained strong market shares in key EU markets, having operated 112% of its pre-Covid capacity in the first 9 months of fiscal year 2023. The most notable gains were made in Italy (from 26% to 40%), in Poland (from 27% to 38%), in Ireland (from 49% to 58%) and in Spain (from 21% to 23%).
“With the return of Asian tourists and a strong dollar encouraging Americans to explore Europe, we are seeing strong demand for Easter and summer 2023 flights,” the airline said.
“We have reasonable visibility for the remainder of fiscal year 2023, with annual traffic estimated at 168 million. Ryanair expects the fourth quarter to be loss-making due to the absence of Easter from March, but that profit earnings per share (pre-exceptional) for the 2023 financial year will be in a range of 1.325 to 1.425 billion euros (compared to 1.00 to 1.20 billion euros previously). “This forecast remains highly dependent on the absence of negative events in the fourth quarter (such as Covid and/or the war in Ukraine).” adds the company, however.
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Once again weakened results for European airlines
With fuel accounting for up to 35% of their costs, professionals believe European airlines are unlikely to return to profit until 2023 or 2024 at the earliest. These players predict that energy prices will remain high at least until 2023. The International Air Transport Association (IATA) has announced a forecast of cumulative losses of 9.7 billion dollars in 2022 for airlines at around the world, it will still be necessary to wait until 2023 to see the return to profits on a global scale, due in particular to the surge in oil costs and the rise in labor costs. On the positive side, travel demand seems to be resisting the uncertainties caused by the international economic and political situation. However, the uncertainties concerning the Covid, the war in Ukraine, as well as the rise in prices are strengthening last-minute reservations. According to Iata, only 8% of international reservations made at the end of May went beyond September.
The social climate is deteriorating in low-cost companies
These companies are benefiting from a very strong recovery. They had already managed to monopolize 40% of air traffic in 2021, this proportion could even rise to 50% this year. However, strike movements have affected the activity of Volotea, EasyJet and Ryanair, with confrontations over pay and working conditions. In general, the sector faces a shortage of personnel. After having severely cut their workforce in 2020 and 2021, companies and airports must urgently recruit to support the relaunch of activity.