Ryanair has today reported better than expected profits for the final three months of 2024 and group chief executive Michael O'Leary said he was "cautiously optimistic" about fares for the coming summer on constrained capacity in Europe.
But the airline, Europe's largest by passenger numbers, was forced to cut its passenger traffic forecast for the second time in three months due to Boeing aircraft delivery delays.
The airline saw fares fall 10% over its two summer quarters, in part due to a dispute with online travel agents which has been largely resolved. That improved to an average increase of 1% in the three months to December 31, Ryanair's third quarter.
The company reported after-tax profit for the quarter of €149m, well ahead of the €60m forecast in a company poll of analysts.
That was mainly due to a better-than-expected 1% increase in average fares in the quarter, compared with a fall of 7% during the previous quarter, Chief Financial Officer Neil Sorahan said, citing good last-minute bookings for Christmas and New Year holidays.
It is too early to give guidance on the coming summer, but early indications are that bookings are robust and European short-haul capacity is likely to be constrained, he said.
Michael O'Leary said the constraint could be beneficial for Ryanair for the summer 2025 season.
"For the summer this year modest, cautious optimism is where we should be," with bookings running about 1% ahead of where they were this time last year and pricing "modestly up", Mr O'Leary told an analyst call.
He said he was hopeful of recovering some or all of an 8% fall in fares seen in the last nine months of 2024. "It all looks okay. It doesn't look bumper. It looks fine."
Ryanair, which makes most of its profit during the summer season, said it was "cautiously guiding" after-tax profit for the 12 months to March 31 in a range of €1.55 billion to €1.61 billion.
The airline said it carried a total of 44.9 million passengers in its fiscal third quarter, up 9% on the 41.4 million passengers the same time last year with revenue per passenger rising by 1%.
Its third quarter revenue increased by 10% to €2.96 billion from €2.7 billion, while operating costs rose by 8% to €2.94 billion from €2.72 billion as fuel hedge savings offset higher staff and other costs due partly to Boeing delivery delays.
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Boeing delays
Ryanair said it expects to take delivery of nine Boeing MAX aircraft ahead of its peak summer season, fewer than expected, and as a result will cut its forecast for passenger numbers in the 12 months to March 31, 2026, to 206 million from 210 million.
An earlier forecast of 215 million was cut in November.
The final 29 aircraft of Ryanair's 210 MAX order will arrive by March next year, lifting traffic to 215 million passengers in the year to March 2027, Neil Sorohan said.
Mr Sorahan, who recently returned from a trip to Boeing's production facilities in Seattle, said the delays were disappointing but that he had a "strong level of confidence" that the nine aircraft would arrive on time.
"We can see big improvements in the [Boeing] factory. The quality of the fuselage has improved greatly, but they're just not going to get there for this summer," Sorahan said in an interview.
Michael O'Leary, who was in Seattle with Sorahan, added that he expects Boeing to produce 38 737 MAX jets by the end of the summer, and possibly up to 42 by October, subject to US Federal Aviation Administration approval.
In January 2024, then Federal Aviation Administration chief Mike Whitaker imposed the 38 plane a month production cap after a door panel missing four key bolts flew off a new Alaska Airlines 737 MAX 9.
President Donald Trump's nominee to head the US Transportation Department said he will keep in place the cap on production.
Ryanair, which has no aircraft orders with any other manufacturer, is not particularly concerned about Boeing's financial position, and that as a systematically important company to the US economy it would be supported "come what may," Neil Sorahan said.
Ryanair shares ended higher in Dublin trade today.
