Ryanair reports profit for the first time after the pandemic



In a complex scenario due to the accelerated rise in costs, Ryanair presented its results for the first quarter of its fiscal year 2022: for the first time since the beginning of the Covid-19 pandemic, the company reported a net profit of £170 million ($204 million).

However, the outlook for the year is not extremely positive: the war in Ukraine, the lack of predictability on fuel prices and the still latent threat of new restrictions due to new strains of coronavirus make it difficult to project a fiscal year with net profit.

In the presentation, Michael O’Leary said he is confident of a full earnings recovery, but is unsure whether that positive result will come in 2023 or 2024.

While the average fare was down 4% from the pre-pandemic scenario and expects to carry 17 million more passengers, operating costs soared: from 680 million (for 8.1 million passengers carried) in Q1 2021 to 2.38 billion for 45.5 million occupied seats in Q1 2022.

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On the other hand, positive numbers do not automatically imply a gain for the company’s shareholders: Ryanair CFO Neil Sorahan said that the next two years will be dedicated to reducing debt rather than paying dividends. No wonder then that the airline’s shares were down 1% after the results presentation.

The Boeing 737-8200, a key factor; the 737-10, not so much

Sorahan also said that, while he is in constant contact with Boeing to discuss its fleet plans, now the price of the 737-10 is «nowhere near» what Ryanair expects to be able to place an order on the largest variant of the 737 MAX family.

The operator’s strategy of entering a confrontation with the manufacturer to try to lower its prices is not new, nor is it surprising that it is focusing on the -10, a model that received orders at the recent Farnborough show but whose certification hangs in the balance and has an ever-closer definition date.

Ryanair expects to have 73 Boeing 737-8200 Gamechangers by the end of the current fiscal year, and by then the 737-10 should have its future clear: whether it achieved certification in time without the need for modifications to its cockpit – which means that its crews will not need additional training -, whether it obtained the long-awaited extension to continue working on the new EICAS or whether it was finally left in a drawer.

If the latter happens, the signed orders will be converted to 737-9 and will surely define the operator’s intentions, triggering a new round of statements from O’Leary to get a new discount. Nothing new under the sun.

Pablo Díaz (diazpez)
Pablo Díaz (diazpez)
Director Editorial de Aviacionline. Ante todo, data-driven.


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