Ryanair shares slipped on Monday as investors chose to focus on the missed opportunity of delayed Boeing aeroplane deliveries rather than record profits amid the travel boom.
Ryanair Holdings today reported a 34% growth in full-year profit after tax, as traffic grew by 9% to 184 million passengers, which is 23% more than the pre-Covid levels, despite delays in the delivery of new aeroplanes from Boeing.
“The pandemic hangover seems to be truly over for Ryanair as the low cost carrier posted record profit of €1.95bn. A milder winter and early Easter helped boost the slow season as demand for travel shows no signs of letting up,” said Adam Vettese, analyst at investment platform eToro.
Increased revenues helped offset a significantly higher fuel bill, as hedged oil prices rose from $65 per barrel in the fiscal year 2023 to $89 per barrel in the fiscal year 2024. Despite Boeing delivery delays, traffic grew by 9% to 183.7 million passengers.
Revenue per passenger increased by 15%, with average fares rising by 21% and ancillary revenue increasing by 3%. The fuel bill rose by 32%, amounting to an increase of €1.25bn, reaching €5.14bn.
Although the financials were broadly strong, load factor underperformed, while airlines focused on higher fares for growth.
“Ryanair slightly underperformed its 92-93% load factor target for the winter 2023-24 travel season. Third Bridge experts believe airlines are consciously not prioritising load factor to keep fares slightly higher,” said Olly Anibaba, Analyst at Third Bridge.
Ultimately, Ryanair shares fell on Monday due to disappointment around the outlook for earnings in the revised scenarios caused by a small fleet than previously thought.
“The Boeing delivery delays will be a huge problem for Ryanair. Third Bridge experts expect Ryanair to receive only half of what was promised, potentially reducing passenger volumes by 5-10 million. Ryanair can offset some of the impact on profits by removing the worst-performing routes from their network,” said Anibaba
