Ryanair profits nearly halved in first quarter results with softer pricing in summer

Ryanair's profit after tax in the first quarter of the fiscal year fell 46% to €360 million, compared to the same period last year. While it saw strong traffic growth of 10% to 55.5 million passengers, the timing of Easter holidays and softer than expected pricing for the summer holidays had impacted its earnings. For the second quarter, with softer pricing despite high demand, air fares are expected to be ""materially lower"" than last year with previous estimations anticipating a flat comparison. Revenue per passenger fell approximately 10% with average fares down 15%. Its total revenue in the quarter was flat at €3.6bn. Operating costs had jumped 11% to €3.26bn in the quarter compared to last year. It cited growing staff costs as well as Boeing delays impacting its costs. It expects to add four 737-8200 'gamechangers' in its fleet by the end of July, with it having a fleet of 156 of the aircraft at the end of June. Ryanair said the deliveries are 20 short of its contracted deliveries. It has a fleet of 566 737s in total. It extended operating leases on three of its A320s to 2028 with Lauda. ""We will continue to take delivery of 737s through August and September even though we will be unable to schedule these aircraft for peak summer flights,"" the airline read in a statement. In its earnings call, the airline's CEO Michael O'Leary said: ""We get very modest compensation [for the Boeing delivery delays], mostly in the form of maintenance and other credits. Our focus has been getting those deliveries before the end of July so we at least have the maximum number of aircraft available for August. But the compensation we receive will not reflect the significant loss we're suffering as a result of being 20 aircraft short."" It lowered its traffic growth as a result of the delays down to an 8% growth, subject to aircraft deliveries remaining on track. After hedging around 75% of its fuel for the full fiscal year 2025, it expects to save over €450 million. At the quarter end, it held €4.49bn in gross cash after cash expenditure of around €500 million and €250 million in share buybacks. Net cash increased to €1.74bn as of June 30, 2024. The airline hopes to provide more insight into its full fiscal year profit after tax guidance in its first half year results. It is continuing to navigate geopolitical tensions, air traffic control issues, capacity constraints, and Boeing deliveries - all of which are expected to be headwinds for its full year results.