Ryanair recovers losses but warns air travel market remains ‘fragile’

Ryanairwhich has so far avoided many of the problems faced by other European airlines, reported a modest profit for the three months from April to June.

Europe’s biggest budget airline made a profit of €170m (£145m) and filled 92 per cent of its seats.

In the corresponding quarter a year earlier, the loss amounted to 273 million euros with a load factor of 73 percent.

But compared to the same period of 2019, the profit decreased by 30 percent.

The airline said average fares in April, May and June fell due to Russia’s invasion of Ukraine and subsequent consumer uncertainty, but that “ancillary services” – from pre-seat selection to baggage – are currently more than €22.50 ( £19.20) per passenger.

Fares in July, August and September are a “low double-digit percentage” of pre-pandemic levels – in other words, more than 10 percent higher than in summer 2019.

Michael O’Leary, Ryanair’s chief executive, said the decision to minimize job losses and keep crews active and “relevant” was justified.

Many European airlines, airports and transport companies are struggling to fill jobs that have been cut during the pandemic.

“We are fully staffed despite being at 115 percent of our pre-Covid capacity,” Mr O’Leary said.

“Our business, our schedules and our customers are being disrupted by unprecedented ATC [air-traffic control] and airport service delays, but we remain confident that we can operate nearly 100 percent of our scheduled flights.”

British Airways and the UK’s largest budget airline, EasyJethave canceled around 40,000 flights between them this summer – taking more than 7 million seats out of the market.

Ryanair’s CEO expressed caution about the future, saying: “While we remain hopeful that Europe’s high vaccination rates will allow the airlines and tourism industry to fully recover and finally put Covid behind us, we cannot ignore the risk of new variants of Covid emerging in autumn 2022 year.

“Our experience with Omicron last November and the invasion of Ukraine in February shows how fragile the air transport market remains.

“The strength of any recovery will largely depend on the absence of adverse or unexpected events during the remainder of FY23. [the current financial year, which runs until the end of March 2023].

“Any guidance is subject to very rapid change as a result of unexpected events beyond our control during what remains a very strong but still fragile recovery.”

Allegra Dawes, senior analyst at Third Bridge, said: “The golden age of low-cost air travel is over thanks to decade-high oil prices and inflation. However, Ryanair’s fuel hedging policy means they are in a better position to remain price competitive and under less pressure to increase fares over the next 12 months.”

Ryanair recovers losses but warns air travel market remains ‘fragile’

Source link Ryanair recovers losses but warns air travel market remains ‘fragile’

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