Ryanair reports record €211m third-quarter profit

Airports are better prepared for a summer travel surge this year than in 2022, but air traffic control problems will delay and disrupt flights, according to Ryanair chief executive Michael O’Leary.

Long queues, delays, lost bags and other problems caused by a lack of airport staff marred last summer for millions of European holidaymakers. Mr O’Leary told industry analysts that Ryanair believed airports and the ground-handling companies, responsible for baggage and other services, had built up the resources to manage strong summer demand.

“We expect a lot less disruption at airports this summer,” he said after the airline confirmed that it earned €211 million profit in the three months ended December 31st. However, he warned that air traffic control problems, including strikes in France and staff shortages in Germany, would cause problems, particularly in April, May and June. “Air traffic control will be a major challenge, will cause a lot of flight delays or disruptions,” he predicted.

He added that Ryanair and other airlines were pressuring the EU to intervene and protect over-flights when air traffic controllers in individual member states went on strike, which already happens in Greece and Italy. The airline chief dismissed the European Commission’s response to this as “useless”, saying it would not take the simple solution of protecting over-flights.

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Ryanair hopes to fly 185 million passengers in its next financial year, which begins on April 1st, as many Europeans head once again to the sun for their summer holidays. A record five million people booked flights for the coming months during one week in January, according to the airline chief, although he stressed that sales would not continue at this level.

Overall bookings are strong for the February school midterm break, through Easter and into summer, but Mr O’Leary repeated cautions that Covid, the Ukraine conflict or some other “unforeseen black swan event” could derail recovery.

Christmas and October mid-term demand boosted passengers to a record 38.4 million in the three months to new year’s eve, the third quarter of the airline’s financial year.

Mr O’Leary, confirmed that Ryanair was on track to earn profit between €1.325 billion and €1.425 billion, Covid and other risks allowing, in this financial year, which ends on March 31st.

Ryanair is due to receive 51 new jets from Boeing by the summer. Commenting on reports of industry-wide delays by the US manufacturer, chief financial officer Neil Sorahan estimated that the airline could receive four or five fewer aircraft than scheduled by the peak holiday season. He added that Ryanair “babysat” Boeing to monitor deliveries and pointed out that the US manufacturer prioritised the airline as it was a big customer.

Ryanair calculates that 45 of the new aircraft should be enough to allow it hit its 185 million passenger target for the 12 months ended March 31st.

Mr Sorahan confirmed that the airline was on track to cut net debt to zero by April 2024, from €960 million at the end of last year.He noted that it would fund €1.6 billion in debt repayments and €2.5 billion in capital spending from its own cash flows.

Mr O’Leary pointed out that Ryanair continued to grow market share as rivals including TAP, Lufthansa and ITA – formerly Alitalia – cut or failed to restore capacity. He described Flybe’s failure as ”not unhelpful“ as it hit airports including Birmingham and Belfast where Ryanair intended growing.

Ryanair says there is a growing gap between its costs, which are around €30 per passenger, excluding fuel, and those of its rivals, which the Irish group says have grown since the industry emerged from the pandemic.