Ryanair profit, traffic up in full year “despite Boeing delays”

Ryanair’s profit after tax soared 34% to €1.92bn ($2.1bn) in the full financial year 2023-2024, with revenues up 25% to €13.44bn ($14.6bn) year-on-year (YoY). Furthermore, passenger numbers climbed 9% YoY to 183.7 million, marking a 23% increase over its pre-Covid in 2019. The Irish low-cost airline CEO Michael O’Leary said in an earnings call that these positive figures come “despite Boeing delays that hampered our traffic growth.” O’Leary added that Boeing deliveries would be 23 aircraft short of its contracted deliveries for its summer 2024. Though, he said: “We have seen an improvement in the quality of the fuselage that has been delivered from Wichita to Seattle, and also an improvement in the quality of the final outcome delivery”. He added: “There remains a risk that Boeing deliveries could slip further, although we’re becoming increasingly optimistic that the nine extra aircraft we get through June and July will be delivered on time and at least we’ll able to use those through August and September.” The airline does it expect traffic growth will “occur in lower yielding” than anticipated in the second half of the year as a result of the delays. Though, the delays also boosted its net cash which was at €1.37bn ($1.5bn) at the end of the full year. “That’s given us the opportunity to launch a share buyback scheme of €700 million ($761.1 million) which will take place over the next six months,” O’Leary added. In addition, its gross cash at year-end was €4.12bn ($4.5bn), “despite €2.4bn capital expenditure and well over €1bn debt repayments.” Operating costs had also seen a sharp increase at 24%, reaching €11.38bn ($12.4bn), and the airline also noted its fuel expenses had risen 32% to €5.14bn ($5.6bn) in the full financial year. As a result, O’Leary said in Ryanair’s earnings call that average fares rose 21%, which was “badly needed” because of the fuel bill increases. O’Leary said: “Our full year 2025 fuel requirements are over 70% hedged and just under $80 a barrel. And we’ve also locked away the first 10% of our full year 2026 fuel requirements at about $79 a barrel.” The airline believes that its fuel savings, along with OEM deliveries as well as A320 fleet groundings, will “constrain capacity growth in Europe for some years”, O’Leary said, and will allow for “profitable growth for Ryanair”. This will also be bolstered by continued airline consolidation in Europe. O’Leary added that European consolidation should be facilitated by the European Commission or face the risk of essential airlines going “bust”. He said: “The EU Commission needs to have a longer-term vision for air travel in Europe. The European single market vitally depends on low-cost air travel and the only way that’s going to be sustained is with a smaller number of larger, more sustainable carriers.” Ryanair said its short-haul summer 2024 outlook is “positive, with bookings trending ahead of last year.” It also expects its FY25 traffic to increase by 8% to 200 million passengers. Though, its results for the year ahead will be “heavily dependent on avoiding adverse events during the year”, O’Leary said, noting the potential “adverse developments” from conflicts in Ukraine and the Middle East, as well as the potential impact on growth from Boeing delivery delays. The airline added two new non-executive directors to its board; former UK home secretary Amber Rudd, who served under Theresa May's government, and former McKinsey & Company partner Jinane Laghrari Laabi. They will join from July 1, 2024. In addition, board members Louise Phelan and Michael Cawley will step down from the board at the end of June after their nine-year tenure.