7th Nov 2022 14:56
(Alliance News) - European airline stocks got a boost on Monday from half-year numbers released by Ryanair Holdings PLC, as the Irish carrier said profit, revenue and passengers all exceeded pre-pandemic levels.
Ryanair shares were up 5.6% at EUR12.99 in Dublin on Monday afternoon. In London, budget rivals easyJet PLC and Wizz Air Holdings PLC were up 4.7% and 8.6%, respectively.
Shares in International Consolidated Airlines Group SA - owner of British Airways, Iberia and Aer Lingus - were up 2.6%. In Paris, Air France KLM SA was up 1.8%, while in Frankfurt, Deutsche Lufthansa AG was up 1.4%.
Ryanair said that, in the six months to September 30, revenue trebled year-on-year to EUR6.62 billion from EUR2.15 billion. The recent figure was 23% higher than EUR5.39 billion three years ago, meaning before the Covid-19 pandemic.
The Dublin-based airline swung to an interim pretax profit of EUR1.55 billion from a EUR99.9 million loss in the first financial half of 2021. This beat pre-pandemic profit of EUR1.26 billion.
Ryanair carried 95.1 million customers during the recent six months, more than doubled from 39.1 million a year before and exceeding 85.7 million three years ago. The load factor improved to 94% from 79% a year prior but was below 96% three years ago.
Ryanair raised its traffic guidance for its current financial year, which ends on March 31, to 168 million passengers, up 13% from 148.6 million three years ago and up 71% from 97.1 million in financial 2022.
Looking ahead, Ryanair said bookings are strong but the economic situation is "fragile". It also noted that the key Easter holiday will be on April 9 and so fall into financial 2024.
"The recovery for the remainder of financial year 2023 remains fragile and could yet be impacted by new Covid variants or adverse geopolitical events such as Ukraine. However forward bookings, both traffic and fares remain strong over the October school mid-terms and into the peak Christmas travel period. We hope to avoid any repeat of last year's Omicron lockdowns which damaged last Christmas at such short notice," Ryanair said.
"As is normal, at this time of year, we have almost zero visibility into the fourth quarter which is traditionally our weakest quarter and which this year doesn't have any Easter benefit."
While Ryanair's results and outlook gave a positive read-across to the shares of its European competitors, Olly Anibaba, an analyst at research house Third Bridge, said Ryanair is in a better position than they are to cope with market uncertainties, such as the cost-of-living crisis, higher fuel costs, and labour shortages.
"Our experts say that the company is hiring early and is releasing its summer 2023 flight schedule early to prepare for falling demand. Ryanair's strong hedging position in currency and jet fuel can limit its risk exposure to the strengthening of USD and volatile energy markets," Anibaba said.
"Ryanair is the market leader in the cost-saving business model, offering more affordable price fares than competitors."
Liberum kept a 'hold' rating on Ryanair shares.
"Management appears positive on the volume outlook...but slightly tentative on profits," said analyst Gerald Khoo. "We remain cautious on next year, with consensus implying a double-digit percentage average fare improvement, an acceleration on this year despite recessionary risks."
By Tom Budszus; [email protected]; and Tom Waite; [email protected]
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