2023-05-23 17:30:00
If you used to travel with Ryanair before the 2020s, you must have benefited from an unmissable offer at least once. In the best periods, some travelers might even benefit from a flight for 1 euro. A bygone era that the coronavirus crisis has only accentuated. However, it was still possible to obtain tickets at a good price thanks to one of the company’s latest offers, flights at 9.99 euros. An offer that should not last long.
“The days of 9.99 euro plane tickets may be long behind us,” Neil Soharan, chief financial officer at Ryanair, told Bloomberg. It seems certain that the price of a flight with the low-cost airline will cost much more in the future. And this despite the desire to travel. “The demand for leisure travel this summer in Europe appears robust” and “despite inflation weighing on consumer spending, European consumers continue to favor travel over other forms of entertainment,” said Olly Anibaba, Third Bridge analyst.
With this statement from Neil Soharan, Ryanair’s message seems clear: “Ryanair and other airlines have warned that the era of ultra-low fares may be coming to an end. They prepare customers for possible price increases,” the analyst continues. It remains to be seen how the airline will cope with slower periods, such as winter, to fill its planes. “She might be brought to offer reductions”. As enticing as in the past? Probably not.
Benefits
The low-cost airline posted a net profit of 1.4 billion euros for its 2022/23 financial year, once morest a loss of 355 million a year earlier, despite operational costs rising by 75%. “We have seen a very strong recovery in post-Covid traffic”, and this “is now 13 to 14% higher than our pre-Covid volumes, but profitability is still slightly lower”, summed up the boss. of Ryanair, Michael O’Leary.
“People had been locked up for two years” over the confinements decided in the context of the Covid-19 pandemic, “and they wanted to start traveling once more”, added Mr. O’Leary. During the period, Ryanair saw its turnover more than double, to 10.8 billion euros, and its traffic increase by 74%, to almost 170 million passengers. Its prices are up 10% from pre-Covid levels.
Ryanair had returned to profit for its first three quarters, but the company said it remained in the red for the fourth quarter alone, with a loss of 154 million euros.
3,000 flights per day
Ryanair has repeatedly highlighted the fact that it has laid off fewer workers than its competitors during the pandemic, which grounded air traffic for months – it had instead negotiated pay cuts with unions.
Salaries “have been restored 28 months in advance (…) for almost all the crews”, Ryanair said on Monday. Its competitor Easyjet, penalized last year by staff shortages, has still not managed to get back into the green.
“Ryanair’s market share has increased significantly in most EU markets”, particularly in Italy, Poland or Ireland, Mr. O’Leary argued on Monday.
The company intends to implement this summer the largest flight program in its history, with more than 3,000 daily trips, and hopes to increase the number of its passengers by 10% this year, to 185 million. “The real test for Ryanair will be off-peak periods, especially in winter. To fill their planes, (the company) may have to offer discounts” at this time of year, according to Olly Anibaba, of Third Bridge.
Ryanair, which foresees “a modest increase in profits” this year, also notes that its result might suffer from a “modest increase” in its costs, due in particular to a fuel bill which will rise by more than one billion euros. euros, and “recent delivery delays from Boeing”.
The company, which hopes to carry up to 300 million passengers per year in 2034, however placed a large firm order in early May for 150 medium-haul 737 MAX, Boeing’s flagship aircraft, and put an option for 150 aircraft. additional.
The order is valued at 40 billion dollars at list price but Ryanair obtained a “competitive discount”, said Michael O’Leary.
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