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Ryanair sees softer summer fares as profits take off

Mon, 20th May 2024 07:36

(Sharecast News) - Budget airline Ryanair on Monday reported higher annual profits but warned that summer airfares would be softer than anticipated.

The company on Monday added that it would also start a €700m share buyback as it had "surplus cash".

Profit after tax climbed 34%to €1.9bn in the 12 months to March 30 as demand rose 9% to 184 million passengers. Revenue jumped 25% to €13.4bn.

With EU short-haul capacity constrained, demand this summer was positive, with bookings trending ahead of last year, the company said.

However, chief executive Michael O'Leary, said recent pricing "is softer than we expected", with the first quarter "requiring more price stimulation than last year - particularly as half of Easter moved into Mar. and out of April".

"While visibility is limited, and the outcome will be heavily dependent on close-in peak summer 2024 pricing, we remain cautiously optimistic that peak summer fares will be flat to modestly ahead of last summer." The no-frills airline had previously forecast rises of 10%.

O'Leary added that that as the final quarter of its 2024/25 fiscal year would not benefit from an early Easter as it did this year it would be "too early to be able to provide sensible or accurate guidance", although he did forecast 8% traffic growth to 198 - 200 million passengers, subject to Boeing deliveries returning to contracted levels before year-end.

"The final outcome for full-year 2025 will be heavily dependent upon avoiding adverse events ... such as wars in Ukraine and the Middle East, extensive air traffic control disruptions or further Boeing delivery delays."

Ryanair now expects to be short of 23 Boeing 737 Max aircraft by the end of July and warned the was still a risk that deliveries could slip further, but talks were ongoing with Boeing chief Dave Calhoun, who himself is leaving the company after a tumultuous period at the plane maker after two fatal crashes involving the Max variant.

Reporting by Frank Prenesti for Sharecast.com

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