Ryanair closes in on $2bn profit after 21% fare hike
Low-cost airline Ryanair and its group airlines ended the 2024 financial year with a significantly improved economic result, which increased by 34% compared to the previous year to exceed €1,920 million. The explanation for this good performance lies in increased passenger traffic, which rose 9% to 183.7 million, up 23% on pre-Covid levels.
Also in the 15% increase in revenue per passenger as a result an average increase of 21% in their fares, which are already on the threshold of 50 euros per ticket. (49.80 euros). Ryanair says last summer saw historic passenger numbers, followed by strong demand figures last Easter. The company also increased sales of ancillary products by 12% to $4.3 billion.
However, Airlines still have room for improvement, as it reports a significant increase in fuel costs, which, despite having insurance coverage, have risen from $65 to $89 per barrel from last year to the year just ended. So, The fuel bill increased by 32%, amounting to an additional €1,250 million., until a total cost of $5,140 million is deployed. For 2025 now, that cost would be below $80 a barrel, allowing her to save up to $450 million once 70% of this new year’s planned supply is covered at $1.11 a barrel. barrel.
Incomes are growing, but expenses are also rising
Total revenue increased by 25% to exceed 13,440 million, which is also the result increasing your customers’ expenses beyond the plane ticketeg additional luggage or seat selection. They grew by 12%, to 4.3 billion euros, or about 23.40 euros per passenger.
At the same time, costs increased by 24% due to rising fuel prices and increased personnel costs, due to the restoration of pre-pandemic salaries for pilots and increasing them for crew members or engineers. The company paid off more than 1,000 million debts and closed with 4,120 million in gross cash and capital expenditure of 2,400 million euros.
Dividends and share repurchases
“Our strategy has been to prioritize recovery and pay increases for our employees. We intend to repay the remaining indebtedness as it matures in 2025 and 2026.“Once these issues are resolved, the group’s policy will be to prioritize growth to enhance shareholder value,” they explain.
So, in terms of dividends, Ryanair paid a first payment of €0.175 in February and a second payment will be made in September for a further €0.178. In addition, its Council approved 700 million share buyback euro, which will be officially launched at the end of the week.
Expect 8% more travelers
The Irish airline is confident that passenger numbers will grow by a further 8%, reaching 200 million transported to March 2025. Ryanair this summer will open 200 new routes the fruits of its expansion to five new operating bases, which, coupled with limited demand in Europe due to engine maintenance on a large portion of the Airbus A320, will drive demand and increase revenues.
In fact, the company suggests that rates this high season “will be the same or slightly higher than last summer.”“This, coupled with modest cost increases, will see the Irish airline continue to widen its margin compared to the rest of its continental competitors.
Boeing delivery delays
The company aims to reach 300 million passengers in 2034 once its large order of 300 B737-MAX-10 aircraft enters service, of which it has already received 146, 48 of them in the last twelve months. Michael O’Leary, the company’s chief executive, classifies the aircraft as “game-changers” capable of changing market conditions, and hopes to receive 12 more aircraft between May and July.
Despite this, he notes that “they are 23 below our contracted deliveries with Boeing” and that “there is a risk of further delays in deliveriesAccording to O’Leary, delays in deliveries will eat into expected profits, as “delays mean traffic growth will occur in the second half of the year, which is less profitable.”
The company assures that it will continue to receive aircraft in July, August and September, but faced with increased demand, its subsidiary Laudamotion renews three lease contracts operation of A320 aircraft for four years, until 2028. The total fleet of the Ryanair holding reached 584 aircraft at the end of March.