Ryanair cuts losses and aims to become profitable again

London After two years of pandemic lull, Europe’s largest low-cost airline Ryanair wants to grow again this year. The bookings for the summer are well above the previous year’s level. “The recovery is fragile,” warned CEO Michael O’Leary when presenting the annual results. The 61-year-old manager was therefore unable to give an outlook on the further course of business in the year.

The main reasons for the uncertainty are the pandemic, which has not yet been finally overcome, and the war in Ukraine. “Given the continued risk of negative news on these two issues, it is impractical, if not impossible, to provide any reasonable or accurate earnings guidance at this time,” Ryanair said. Ryanair shares fell as much as 3.5 percent in early trading.

In addition, the worldwide inflation surge has driven up the cost of living enormously and thus reduced the holiday budget of many travellers. Ryanair has therefore not been able to raise ticket prices as hoped and had to boost demand with price reductions in the first quarter.

Nevertheless, the Irish airline assumes that it will be able to increase its passenger numbers from 97 to 165 million in the current financial year. That would be even more passengers than the previous record of 149 million. We are “cautiously optimistic” that air fares could even rise slightly above 2019 levels during the peak summer season.

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The group is striving for “reasonable profitability”, the company said. That sounds a lot more cautious than at the end of March, when O’Leary announced in an interview: “We would be disappointed if we didn’t make more than a billion profits in the next twelve months.”

Ryanair neck and neck with rival Easyjet

In the past financial year, Ryanair was able to significantly reduce its net loss from a good one billion to 355 million euros with the help of cost reductions. Analysts had expected even more and calculated a target value of 370 million euros. Sales tripled over the year to 4.8 billion euros.

Like its competitor Easyjet, Ryanair is on the way to returning to the old flight altitude from before the pandemic. Easyjet had recently reported a sharp increase in bookings and announced that it would return “approximately to the flight level of 2019” in the summer. The Ryanair rival will present its half-year results next Thursday.

More: How investors can benefit from the travel comeback.

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