Budget carrier Ryanair reported its best-ever annual profit on Monday, as passenger and revenue growth offset a sharp rise in operating costs but also signaled a softer pricing environment for the quarter.
The Dublin-based company said profit after tax for the full year to March 2024 rose 34% to 1.92 billion euros ($2.09 billion), with revenue rising 25% year-on-year to 13.44 billion euros.
The airline serves 184 million passengers, 23% more than before the pandemic. Increased passenger traffic and higher fares have helped Ryanair overcome soaring costs: operating costs have increased by 24% year-on-year, and the airline’s jet fuel bills have soared by 32%.
The airline also announced a 700 million euro share buyback program, which chief financial officer Neil Sorahan said reflected a “very strong” balance sheet.
“Our top priority is: restoring employees’ wages after COVID-19, raising wages, paying down debt,” Sorahan told CNBC’s “Squawk Box Europe.”
“We have been paying down the bonds and we had $1.4 billion in total cash at the end of last year, which is why the board is now confident that we can actually return that $700 million to shareholders on the basis of the ordinary dividend plan.”
‘Recession feeling’
Ryanair’s Dublin-listed shares fell 0.46% in early trading, with analysts at Deutsche Bank highlighting lower-than-expected pricing in the near term.
“While buybacks are good news and show confidence, and while (full-year) ’24 was broadly consistent with much of the expected (full-year) ’25 guidance, we are concerned that further softening of pricing commentary for the summer peak may win,” analysts said in a note.
Buyback levels may also be lower than some expectations, they added.
In a presentation to investors on Monday, Ryanair CEO Michael O’Leary said Weaker pricing may be due to ‘recession feeling’ Reuters reported that consumer confidence in Europe may be weak.
“If we have to discount or cut fares to get to 94% load factor in April, May and June, then so be it,” he added, according to Reuters. Load factor refers to the number of seats available Percentage full, Ryanair’s passenger load factor for the full year ending 2024 is 94%.
In December last year, numerous online travel agencies (OTAs) suddenly canceled Ryanair flights, affecting pricing throughout the year.
Sorahan told CNBC the move was “surprising but not unwelcome,” adding that Ryanair has now signed new deals with several large online travel agencies. He said the positive side was that Ryanair was now dealing with more customers directly rather than through third parties.
Other challenges facing Ryanair include continued delays in the delivery of new Boeing aircraft and the grounding of several Airbus planes due to engine problems.
“Production capacity will be constrained for some time to come,” Sorahan said.
About The Author
