By Padraic Halpin and Conor Humphries DUBLIN (Reuters) – Ryanair said it was impossible to give detailed guidance beyond hoping to return to “reasonable profitability” this year amid uncertainties over COVID-19 and the Ukraine war, knocking its shares after posting a smaller annual loss. The largest European airline by passenger numbers posted a 355 million […]
Ryanair cautious about ‘fragile’ recovery after smaller annual loss
By Padraic Halpin and Conor Humphries
DUBLIN (Reuters) – Ryanair said it was impossible to give detailed guidance beyond hoping to return to “reasonable profitability” this year amid uncertainties over COVID-19 and the Ukraine war, knocking its shares after posting a smaller annual loss.
The largest European airline by passenger numbers posted a 355 million euro ($369 million) loss for the pandemic-scarred 12 months to March 31 on Monday and said it planned to grow its traffic to 165 million passengers this year, up from 97 million a year ago and a pre-COVID-19 record of 149 million.
However, CEO Michael O’Leary said in a statement it was “impractical, if not impossible” to provide a sensible or accurate profit guidance range until the second half of its fiscal year, given the potential continued risk the war in Ukraine and COVID-19 poses to bookings.
O’Leary added that while bookings have improved in recent weeks, he was a little concerned that competitors were talking up the summer recovery too much and that caution was needed heading into a winter with an expected economic downturn.
“It’s too fragile, there remains too many moving parts,” O’Leary said, adding that Ryanair would nevertheless thrive if any of its markets dip into recession due to its lower cost base and ability to offer lower fares than its competitors.
Ryanair shares were 3.5% lower at 13.09 euros at 0715 GMT.
As the airline reported a 27% drop in fares, Ryanair Chief Financial Officer Neil Sorahan told Reuters there had been single-digit percentage increases in ticket prices compared to the same period in the year before the pandemic in recent weeks, but fare levels are lower than the company had anticipated earlier.
The airline is cautiously optimistic that peak summer fares will be somewhat ahead of pre-pandemic levels but O’Leary said it was impossible to predict what average fares would be like in the second half of the year.
Customers were also still waiting until much closer than usual to the time of their trips to book, he added.
Ryanair has hedged 80% of its 2023 fuel needs and 10% for 2024 at a large discount to spot prices, which analysts at Citigroup said leaves the airline well positioned to gain market share.
The full-year pre-exceptional loss of 355 million euros was less than a forecast loss of 370 million euros in a company poll of analysts and a loss of 1 billion euros in its previous financial year. The airline made a profit of 1 billion euros in the year to March 2020.
O’Leary said Ryanair would likely be profitable in the coming year, even if the outlook is worse than anticipated but that it would be significantly behind pre-pandemic levels.
Ryanair said it is continuing to engage with Boeing about an order for its largest type of single-aisle jet, the 737 MAX 10, after walking away from negotiations to buy 200 of the aircraft last year.
The U.S. planemaker is battling certification and industrial headaches across its jetliner portfolio and O’Leary said all Ryanair had seen since the talks broke down over price was more Boeing customers signing up for rival Airbus aircraft.
“It’s no secret that the management of Boeing are facing significant challenges… I think Boeing needs to fight back, it needs to win back some of that market share,” O’Leary said in an investor presentation.
($1 = 0.9619 euros)
(Reporting by Conor Humphries and Padraic Halpin; Editing by Rashmi Aich, Kirsten Donovan)