Yahoo Finance Ryanair returns to spring profit but warns of autumn Covid risks
Ryanair has made its first spring profits since before the coronavirus pandemic as passenger numbers surpassed pre-Covid-19 levels, but warned of the risk of possible new virus variants in the autumn.
The Irish carrier made a profit before tax of €203m (£173m) between April and June, compared with a steep €325m loss in the equivalent period a year earlier. It said passenger numbers had risen to 45.5 million, 9% more than in 2019.
Airlines endured years of steep losses during the pandemic, but the end of the strictest travel restrictions in most big markets in Europe and North America has prompted an increase in the number of journeys.
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The rebound has been so rapid that many airlines and airports have struggled to keep up, leading to long queues, delays, flight cancellations and lost bags.
Michael O’Leary, Ryanair’s chief executive, described the recovery as “very strong but still fragile”, with evidence of pent-up demand, but added that people were booking less far ahead than they were before the pandemic.
He warned that the possible emergence of a new coronavirus variant – like Omicron, which destroyed an earlier recovery in traffic – meant the airline was unable to forecast profits for the year.
Ryanair also said its fuel costs had increased by more than six times over the year. Its total bill for the quarter reached €1bn, but Neil Sorahan, the Ryanair chief financial officer, said it was covered by hedges that allow it to buy fuel at about $60 a barrel, significantly lower than immediate market prices and lower than competitors.
Ryanair added that the delivery of new Boeing 737 Max planes would cut its fuel bills as well as emissions for each plane. Carbon emissions from aviation are expected to increase this year after two years of depressed demand.
Sorahan criticised airports, who he said needed to do “better next year” to avoid the delays and disruption that have plagued the sector.
“They had one job to do, and that was to make sure they had sufficient handlers and security staff,” Sorohan told BBC Radio 4’s Today programme. “They had the schedules a month in advance.”
O’Leary said the airline had been “vindicated” in its decision to cut pay rather than jobs during coronavirus lockdowns as airlines, airports and services companies have struggled to attract staff back.
