4th Jan 2023 14:16
(Alliance News) - Ryanair Holdings PLC on Wednesday reported robust double-digit growth in passenger traffic in December against the previous year.
The low-cost airline said passenger numbers grew 21% to 11.5 million from 9.5 million the previous year.
The Dublin-based firm operated over 65,500 flights in December with a load factor of 92%, compared to 81% a year prior.
On a rolling 12-month basis, passenger numbers more than doubled to 160.4 million from a year ago and load factor the load factor rose to 92%, from 81%.
For analysts at Liberum, the stronger year-on-year performance reflected a weaker comparative, with December 2021 impacted by the emergence of the Omicron variant and a resurgence in international travel restrictions.
The passenger figures for the quarter also came in slightly below Liberum's forecast. Ryanair reported 38.4 million passengers in the quarter, compared to Liberum's expectation of 40.5 million.
As a result, Liberum said it retained a "cautious stance" with the current consensus that sees a double-digit percentage average fare improvement in the next financial year. This struck Liberum as "challenging" in a "likely recessionary environment".
Peel Hunt's Alexander Paterson also saw Ryanair's December passenger figures as underwhelming, having expected the airline to hit 12.1 million.
"To achieve our forecast of 167.5 million passengers for financial 2023, modestly below guidance of 168 million, 34.0 million passengers are required in 4Q," he said.
This "should be achievable" as long as there are no travel restrictions or sustained periods of bad weather, Paterson argued.
Shares in the firm were trading 0.8% lower at EUR12.46 in Dublin on Wednesday afternoon. In the first couple of days of the new year, the stock has added 2.5%.
Over the past 12 months, however, Ryanair shares are down just over 24%. Victoria Scholar argued this suggests the airline still has a long way to go to restore investor confidence despite Wednesday's strong figures.
"With the imminent recession, inflationary cost pressures and the softening consumer, there are still major headwinds to contend with," Scholar said.
In contrast, AJ Bell's Russ Mould said that the firm was a testament to a "Darwinian, survival of the fittest transition in the airline industry."
"As weaker rivals have entered the departures lounge, Ryanair's competitive position has been enhanced, though this is not such good news for passengers. The company has a well-earned reputation as a hard-nosed operator and it is successfully passing on higher costs to its customers," Mould explained.
Wednesday's announcement came days after Ryanair cabin crews launched a three-day strike over the New Year holiday, grounding dozens of flights and hitting thousands of passengers.
The industrial action came as the cost of living crisis spurs growing labour strife across Europe that has disrupted the festive period.
Charleroi airport Chief Executive Philippe Verdonck told AFP that the strike action would set to halt 30% of the airlines' flights through its Belgium hub.
Overall, some 22,000 passengers were expected to be affected over the three days, he said.
By Heather Rydings, Alliance News senior economics reporter
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