Ryanair Exceeds Q3 Profits but Lowers Growth Forecast

Ryanair, Europe’s largest low-cost carrier, reported a robust after-tax profit of €149 million ($155.8 million) for the fiscal third quarter ending in December, significantly surpassing analyst expectations of €60 million. This strong financial performance highlights Ryanair’s resilience in a challenging aviation market, driven by higher fares and increased passenger bookings during the holiday season.

Strong Q3 Performance
Ryanair’s impressive Q3 profit was fueled by marginally higher fares and a surge in bookings over the Christmas and New Year period. The airline saw a 9% increase in passenger traffic, totaling 45 million passengers despite ongoing delays in Boeing’s 737 aircraft deliveries. This growth underscores Ryanair’s ability to maintain high occupancy rates and optimize revenue through strategic pricing adjustments.

Boeing Delivery Delays Impact Growth Projections
Despite the strong quarterly results, Ryanair has adjusted its long-term passenger traffic goals due to persistent delays in Boeing’s 737 production. Originally targeting 210 million passengers by March 2026, Ryanair has now revised this figure down to 206 million. This marks the second consecutive reduction in their passenger growth forecast, reflecting the impact of supply chain disruptions and production setbacks at Boeing, exacerbated by a strike at the firm in late 2024.

CFO’s Optimistic Yet Cautious Outlook
Neil Sorahan, Ryanair’s Chief Financial Officer, expressed cautious optimism about the airline’s future. Speaking on CNBC’s “Squawk Box Europe,” Sorahan stated, “I’d be optimistic into next year. Bookings are very strong into the summer, although it is just too early to call where they may go.” Despite being disappointed by the need to lower traffic forecasts, Sorahan remains hopeful that improvements in Boeing’s supply chain and production processes will stabilize aircraft deliveries.

Sorahan highlighted significant enhancements in Boeing’s operations, noting “huge improvements in relation to supply chain and everything else” during his recent visit to Boeing’s production facilities in Seattle. He remains confident that the remaining nine aircraft needed to reach Ryanair’s goal of 181 ‘Gamechangers’ will be delivered, supporting the existing fleet and potentially avoiding further reductions in traffic targets.

Market Reactions and Analyst Insights
Analysts at Citi have noted that Ryanair’s revised capacity guidance may introduce volatility to the airline’s share price. However, they also recognize that Boeing’s delivery issues are an industry-wide challenge, suggesting that Ryanair’s cautious approach could be beneficial for maintaining a stable pricing environment.

Future Profit Guidance
Looking ahead, Ryanair has provided a “cautious guidance” for its full-year after-tax profit, projecting it to fall within the range of €1.55 billion to €1.61 billion for the 12 months ending March 31. This forecast remains subject to potential risks, including ongoing conflicts in Ukraine and the Middle East, as well as further delays in Boeing’s aircraft deliveries.

Commitment to Sustainability and Growth
Ryanair continues to focus on expanding its network and enhancing operational efficiency despite external challenges. The airline’s strategic investments in fleet modernization and route optimization are aimed at sustaining growth and improving passenger experience. By maintaining a strong financial position and adapting to market conditions, Ryanair aims to navigate the complexities of the global aviation landscape effectively.

Ryanair’s third-quarter results demonstrate the airline’s strong financial health and ability to exceed profit expectations through strategic fare increases and high passenger demand. However, the ongoing delays in Boeing’s aircraft deliveries have necessitated a cautious revision of growth forecasts. As Ryanair navigates these challenges, the airline remains committed to delivering value to its customers and stakeholders, positioning itself for continued success in the competitive low-cost carrier market.

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Sources: AirGuide Business airguide.info, bing.com, cnbc.com