JULY TRAFFIC GROWS 11% TO 18.7M GUESTS

    Ryanair Holdings plc today (Wed, 2 Aug) released July 2023 traffic stats as follows:

STRONG EASTER AND WEAK PRIOR YEAR COMPS. DUE TO UKRAINE INVASION

Ryanair Holdings today (24 July) reported Q1 profits of €663m, compared to a Ukraine affected prior year Q1 PAT of €170m thanks to a strong Easter, the extra UK (Coronation) public holiday in May and weak PY comps. due to Russia’s invasion of Ukraine in Feb. 2022 which damaged last year’s Q1 traffic and fares. 

Ryanair’s Michael O’Leary, said:

ENVIRONMENT:

“Every customer switching to Ryanair from high fare EU legacy carriers can reduce their emissions by up to 50% per flight.  We continue to invest heavily in new technology aircraft.  During Q1 we took delivery of  21 fuel efficient, B737-8200 “Gamechangers” (4% more seats, 16% less fuel & CO₂ and 40% quieter).  In May, we signed a deal with Repsol to supply SAF to Ryanair bases in Spain.  This builds on similar SAF arrangements with OMV, Neste & Shell and puts the Group on track to achieve its ambitious 2030 goal of powering 12.5% of Ryanair flights with SAF – with 9.5% already secured. 

The most significant environmental initiative Ryanair can deliver near term, is to press for urgent reform of Europe’s inefficient ATC system.  In May we submitted a petition to the European Commission, signed by over 1m of our customers, calling on the EU to protect “overflights” during national ATC strikes.  We believe this would reduce flight delays, cut flight times, and unnecessary CO₂ emissions.  Over the past 6 months, French ATC alone, has held 60 days of strikes, during which the French Govt. used min. service laws to protect local/domestic flights while disproportionately cancelling overflights.  We, and our customers, call on the EC President, Ursula von der Leyen, to protect the single market for air travel and minimise the impact of ATC strikes on EU citizens (while respecting the right of ATC unions to strike) by insisting that national Govt.’s protect overflights, as is already the case in Greece, Italy and Spain.

Today, we are proud to launch Ryanair’s 2023 Sustainability Report (“Aviation with Purpose”).  Our recent $40bn order for 300 Boeing MAX-10 aircraft (21% more seats, 20% less fuel and 50% quieter) will enable us to pursue even more ambitious environmental targets over the next decade.  We have reset our CO₂ per pax/km target at a very ambitious 50 grams by 2031 (previously 60 grams by 2030).  We have also published the Group’s 1.5 degree Climate Transition Plan.

SOCIAL:

As the Ryanair Group traffic grows to 300m p.a. by FY34, we expect to create over 10,000 new, well-paid, jobs for highly trained aviation professionals.  To facilitate this growth as we take delivery of 90 more Gamechangers and 300 MAX-10s, we recently ordered 12 new CAE simulators (6 firm and 6 options worth over $120m).  Building on the success of our new state-of-the-art aviation training centre in Dublin, we have finalised plans to develop 2 similar excellence centres to accelerate crew training in both Central Europe (Krakow) and the Iberian Peninsula.  We are also upgrading our UK training centre in East-Midlands.

This summer, in anticipation of increased ATC disruptions, we invested heavily in operational resilience (increased crew ratios, doubled the size of our Dublin and Warsaw ops centres, enhanced our day-of-travel app. and continuously improving our live customer comms.) to ensure that our passengers and crew continue to enjoy Ryanair’s industry leading OTP and reliability.  This investment has been rewarded with a strong Q1 CSAT score of 85% (up 2pts on our PY Q1), with “crew friendliness” continuing to be our top score (rated over 90%).

GROWTH:

We are operating our largest ever summer schedule (over 3,200 flights and up to 600,000 passengers daily).  We have opened 3 new bases (Belfast, Lanzarote & Tenerife) and over 190 new routes, further growing our No.1 or No. 2 share in the Italian, Polish, Spanish and UK markets. We have recently announced plans to fly to/from Albania this winter, expanding our CEE footprint offering competition, choice and lower fares than the incumbent carrier.  Structural EU capacity reductions following numerous EU airline failures or fleet reductions during Covid, volatile oil prices (discouraging weaker, unhedged, airlines from adding capacity), a shortage of aircraft (new and leased), the return of Asian traffic and this year’s very strong influx of American visitors to Europe (helped by a strong US$) means that European short-haul capacity remains constrained this summer.  H1 demand is robust and fares remain ahead of last year as we move into peak S.23 although this trend seems weaker in Q2 than it was in Q1.   

European airlines will continue to consolidate over the next 2-3 years, with the takeover of ITA (Italy) and the sale of TAP (Portugal) already underway.  The large backlog of OEM aircraft deliveries is likely to constrain capacity growth in Europe for at least the next 4 years, which will enable Ryanair to further extend our market share gains as we take delivery of almost 100 Gamechangers over the next 3 summers.  Our unit cost advantage over EU competitors, fuel hedging, strong balance sheet and low-cost aircraft orders out to 2033, coupled with our industry leading operational resilience, creates significant growth opportunities for Ryanair over the coming years as we grow traffic to 300m p.a. by FY34.     

Q1 FY24 BUSINESS REVIEW:

Revenue & Costs

Q1 scheduled revenues increased 57% to €2.47bn.  Traffic grew 11% to 50.4m and ave. fares rose 42% to €49 thanks to a strong Easter (the PY Q1 was badly damaged by the Ukraine invasion of Feb. 2022) and an extra UK (Coronation) public holiday in May.  Ancillary revenue increased 15% to €1.18bn (c.€23.30 per passenger).  Total Q1 FY24 revenue therefore rose 40% to €3.65bn.  Total operating costs increased 23% to €2.94bn, primarily due to higher fuel (+30% to €1.34bn), staff costs (reflecting restoration of pay cuts, pre-agreed pay increases and higher crewing ratios as we invest in op. resilience) and higher ATC fees (incl. in airport & handling charges).   Despite a modest increase in unit costs (ex-fuel) to just under €32 in Q1, Ryanair’s cost advantage over EU competitors continues to widen. 

FY24 fuel requirements are almost 85% hedged at approx. $89bbl (with a mix of swaps and caps) and FY25 hedging has increased to 27% at approx. $74bbl.  Over 90% of FY24 €/$ opex is hedged at 1.08 and approx.  50% of FY25 is hedged at 1.12.  Our B-8200 “Gamechanger” order book is fully hedged at €/$1.24 (locking in significant cost savings as we take delivery of these more fuel efficient and quieter aircraft).

Balance Sheet & Liquidity

Ryanair’s balance sheet is one of the strongest in the industry with a BBB+ credit rating and over €4.8bn gross cash at quarter end, despite over €1bn capex.  Net cash increased to €0.98bn at 30 June (€0.56bn at 31 Mar.).  Substantially all of the Group’s B737 fleet is unencumbered, which significantly widens our cost advantage as interest rates and leasing costs continue to rise for competitors.  We are on track to repay our second 2023  bond of €750m as it falls due in Aug. and €2.8bn FY24 capex (incl. peak Gamechanger capex and a MAX-10 signing deposit) from internal cash resources. 

Our Board strategy, as our business recovers, is to firstly prioritise pay restoration and multi-year pay increases for our people.  Secondly, we will pay down maturing debt as it falls due over the next 3 years, while at the same time funding our ambitious aircraft capex, from internally generated cashflows.  Once we are confident that we can fully fund these large commitments, the Board will then consider restarting modest returns to shareholders, who supported Ryanair during the Covid pandemic.  We are conscious that our shareholders invested just over €400m during our Sept. 2020 share placing (during the depth of the Covid crisis), and this was key to Ryanair subsequently issuing an €850m bond which helped us to survive the devastating impact of the Covid pandemic on travel.

FLEET:

Our Gamechanger fleet stood at 119 at quarter end and we expect to increase this to 124 by the end of July.  We expect to take delivery of 49 B-8200s (173 in total) by year-end (Mar. 2024).  As previously noted, Boeing has suffered multiple supply chain challenges, causing repeated delivery delays.  We have worked closely with Boeing to minimise these delays, and the disruption to our schedules and traffic targets.  We had originally expected 51 aircraft deliveries on/before 30 April, but the last of these deliveries was delayed into July.  We hope that our winter 2023/spring 2024 deliveries will be less impacted, but already there are indications from Boeing that some deliveries may be delayed from April 2024 to June 2024. 

In May, Ryanair signed an order with Boeing to purchase 300 Boeing MAX-10 aircraft (150 firm and 150 options) which, subject to shareholder approval at our Sept. AGM, will deliver between 2027 and 2033.  These aircraft have 39 more seats (228 v 189 on the Boeing 737NG), but deliver 20% lower fuel consumption, 20% less CO₂ emissions and are 50% quieter.  The additional seats, apart from increasing revenue growth, will further widen Ryanair’s unit-cost advantage over European competitors for the next 20 years.  We expect up to 50% of the order will be used to replace older NGs, while the remainder will facilitate controlled (but slower) traffic growth to approx. 300m p.a. by FY34.  Given the strength of the Group’s balance sheet, we anticipate that most of this capex will be funded primarily from internal resources (although the Group will remain opportunistic in its financing strategy).

OUTLOOK:

We expect FY24 traffic to grow to approx. 183.5m (up 9%), which is slower than the 185m originally expected, due to Boeing delivery delays in spring and in autumn 2023.  While the cost gap between Ryanair and competitor airlines continues to widen, as previously guided, we expect to see an increase of approx. €2 in ex-fuel unit costs this year due to annualised crew pay restoration, higher crew ratios, increased ATC & route charges and the impact of Gamechanger delivery delays.  While Q2 bookings are strong, the fare increase in Q2 will be much lower than in Q1 due to much stronger PY Q2 pricing in FY23 when peak summer travel snapped back strongly following the Ukraine invasion.  We currently expect Q2 fares will be higher than the prior year Q2 but by a low double digit percentage.  We noted a softening in close-in fares in late June and early July.  The final H1 outcome is, therefore, highly dependent on close-in Aug. and Sept. bookings.  As is normal at this time of year, we have very limited Q3 visibility and zero Q4 visibility.  Having enjoyed a bumper Christmas and New Year travel period last year (the first festive travel season that wasn’t curtailed by the Covid pandemic), we are conscious that consumers may require some fare stimulation to fill our 25% greater seat capacity this winter (compared to pre-Covid) following months of rising mortgage rates and consumer price inflation. If this transpires, then Ryanair’s load active/yield passive strategy, coupled with our industry leading cost base, will uniquely position our Group to capture further market share, albeit at lower fares this winter.

Despite uncertainty over H2 Boeing deliveries, accentuated recently by the collapse of a Yellowstone River bridge in Montana, a significantly higher fuel bill (up €1bn over last year), volatile oil prices for our unhedged fuel, very limited H2 visibility and the risk of tighter consumer spending this winter, we remain cautiously optimistic that FY24 PAT will be modestly ahead of last year.  It is, however, still too early to provide meaningful FY24 PAT guidance.  We hope to be in a position to do so at our H1 results in Nov.”

UP TO 30 AIRCRAFT AND 10M PASSENGERS P.A. IN UKRAINE

Ryanair, Europe’s largest airline, today (Thurs 20^th July) held an important meeting in Kyiv, together with Deputy Prime Minister for Restoration of Ukraine and Minister for Infrastructure, Oleksandr Kubrakov, at which it unveiled plans to invest heavily (over $3 billion) to rapidly rebuild Ukraine’s aviation industry once the war ends and EASA declares that flying to/from Ukraine is safe again. Ryanair also held meetings today in Kyiv with the Ukraine’s main airports, Kyiv, Lviv and Odesa in Boryspil International Airport at the invitation of Oleksiy Dubrevskyy, CEO of Boryspil international Airport.

During the visit, Ryanair’s senior management and the airport examined the condition of the airport terminals, baggage claim and passenger check-in and boarding gate areas, control points, aprons, where they saw the excellent state of the airport infrastructure and its operational readiness to resume flights when safe to do so. Ryanair congratulated the efforts of the employees of Boryspil International Airport to save and maintain the operability of the airport’s infrastructure facilities during the war.

Michael O’Leary, CEO of the Ryanair Group, was inspired by the dedication of Boryspil Airport employees, who are motivated and comprehensively working for the post-war recovery of air traffic. He emphasized: “Ryanair remains a committed partner in rebuilding and investing in Ukraine aviation. Today we saw that in the most difficult conditions of war, the Boryspil airport team demonstrates its professionalism and is fully ready for the resumption of flights as soon as possible.

Ryanair has committed to returning with low fare flights to/from Ukraine within 8 weeks of the reopening of Ukraine air space. This will see 600 weekly flights being operated by Ryanair aircraft from the main airports of Kyiv, Lviv and Odesa, connecting these cities to over 20 EU capitals. In addition, Ryanair plans to open daily domestic flights between Kyiv, Lviv and Odesa, as soon as those airports are able to handle them.

Ryanair plans in the first 12 months post war to offer over 5 million seats to/from and within Ukraine, and this will build to over 10 million seats over a 5 year period. Ryanair, the Govt of Ukraine, and its main airports, have committed to a rapid rebuild in Ukraine’s aviation, and Ryanair will base up to 30 new Boeing 737 MAX aircraft worth over $3 billion at the 3 main Ukraine airports giving Ukrainian citizens and visitors access to Europe’s lowest air fares, as Ukraine rebuilds its economy in a post invasion environment,

Speaking in Kyiv today, Ryanair’s Michael O’Leary said:

“Ryanair was Ukraine’s 2^nd largest airline before the unlawful Russian invasion in Feb 2022. Once the skies over Ukraine have reopened for commercial aviation, Ryanair will charge back into Ukraine linking the main Ukraine airports with over 20 EU capitals, and we are working closely with the Ukrainian Govt to rebuild Ukraine’s aviation, industry and its economy.

The fastest way to rebuild and restore the Ukrainian economy will be with low fare air travel. Ryanair intends to invest heavily in Ukraine and lead this aviation recovery by investing up to $3billion and basing up to 30 new Boeing MAX aircraft at Ukraine’s 3 main airports in Kyiv, Lviv and Odesa. Having previously also served Kharkiv and Kherson airports prior to the invasion, Ryanair will return to serving those airports too, as soon as the infrastructure has been restored. Ryanair remains committed to rebuilding and investing in Ukraine. We currently employ hundreds of Ukrainian pilots, cabin crew and IT professionals, and we will look to creating thousands of new jobs in aviation for Ukrainian citizens when Ukraine skies reopen. Ukraine is a country of 40 million people, many of whom have been dispersed across Europe over the past year. We look forward to being able to reunite these families using Ryanair low fare services to the main Ukrainian airports as soon as it is safe to do so. Ryanair’s low fares services will be critical to the rebuilding and recovery of the Ukrainian economy, and we will invest heavily in partnership with the Ukrainian Govt and Ukraine’s main airports as we grow to carry up to 10m passengers p.a. to/from Ukraine once we are allowed to do so by the European and Ukrainian Regulatory Authorities.”

Summarizing the results of the meeting, Oleksandr Kubrakov, the Minister of Communities, Territories and Infrastructure Development of Ukraine noted:

“Maintaining the operability of the aviation infrastructure and personnel vocational skills remains vital for us in the conditions of war. Meanwhile, the resumption of flights will be possible as soon as the security situation allows. However, we are already working on solutions and investment plans to enable aircraft to fly up quickly. I am grateful for the leadership in the recovery of our aviation industry, for the specific proposals and decisions of Ryanair, a loyal partner of Ukraine.”

Oleksiy Dubrevskyy, CEO of Boryspil Airport said:

“The visit of Ryanair senior management to Boryspil Airport is a powerful signal that the largest airline in Europe sees huge potential in the Ukrainian air transport market. We, meanwhile, are ready to move from strategic planning to specific operational actions when the airspace becomes open and safe for civil aviation. I strongly believe that Boryspil Airport will remain the main air gate for the return of our citizens to Ukraine and will continue to play a leading role in the recovery of the Ukrainian economy.”

SOAK UP SOME WINTER SUN FROM JUST €29.99

Ryanair, Europe’s no.1 airline, has today (12^th July) launched its biggest ever Winter ’23 schedule with over 882k seats for Cyprus’ holidaymakers looking to soak up some winter sun with friends and family or simply looking to liven up the drearier winter months with some overseas adventures.  

Operating from the end of October ’23 to the end of March ’24, Ryanair’s Winter ’23 schedule offers an unbeatable choice of popular ski, Christmas market, seasonal shopping, city escape and winter sun destinations at the lowest fares in Europe.

Cypriot customers/visitors can now use up the last of their annual leave and book a much-deserved Winter break to one of Ryanair’s exciting Winter ’23 destinations with fares available from just €29.99 only at Ryanair.com.

Ryanair’s Dara Brady said:

“We’ve received a huge volume Winter ’23 schedule requests from early bird customers looking to get ahead of the flock and book a Ryanair flight for their Winter ’23 getaways. Whether looking to soak up some with sun, hit the slopes or enjoy the festive season in one of Europe’s breath-takingly beautiful cities, you won’t be disappointed with the unbeatable selection of top ski, Christmas market, seasonal shopping, and winter sun destinations we have on offer at the lowest fares in Europe.

To celebrate the launch of our biggest ever Winter schedule, Ryanair has launched a special seat sale with fares available from just €29.99 only at Ryanair.com.”

Ryanair, Europe’s No.1 airline, today (08 June) welcomed the recent ruling of the Barcelona Court of Appeal regarding the damage caused by Online Travel Agents (OTAs) to Ryanair and our customers. OTAs have no commercial agreements with Ryanair and are not authorised by Ryanair to sell our flights.

The Court affirmed the first instance decision which rejected ACAVE’s (a Spanish travel agencies association) criminal complaint against Ryanair and found that Ryanair’s statements on OTA’s damaging practices are true and supported by extensive documentary evidence. Specifically, the Courts found that it is standard practice for OTAs to overcharge customers by applying ‘service charges’, and that some OTAs frustrate Ryanair’s direct communications with customers and block refund payments by not providing Ryanair with the customer’s correct details.

Ryanair’s Dara Brady said:

“We welcome this Court ruling which definitely upholds Ryanair’s right to raise awareness about the damage OTAs cause to Ryanair’s image and Ryanair’s customers by overcharging them, frustrating our ability to contact them directly with important flight updates and blocking refunds they are entitled to.

We encourage all customers to book their flights directly on the Ryanair website or app to access the lowest fares and direct customer services. Customers should look out for the Ryanair Verified Seal to ensure they are booking directly with Ryanair and getting the best value and service.”

CALL ON URSULA VON DER LEYEN TO TAKE ACTION AND PROTECT EU OVERFLIGHTS DURING REPEATED ATC STRIKES

Ryanair, Europe’s No. 1 airline, has today (5^th June) called on the EU Commission under Ursula von der Leyen to take urgent action to protect overflights and EU citizens’ freedom of movement during the French ATC strike taking place today, Mon 5^th and tomorrow, Tues 6^th June.

In the past 5 months of 2023, there has been 58 days of ATC strikes (over 11 times more than in 2022). These repeated ATC strikes have unfairly forced airlines to disproportionately cancel thousands of EU overflights from Germany, Spain, Italy, the UK and Ireland while France in particular, uses Minimum Service Laws to protect their domestic/short-haul flights while cancelling overflights. This is unfair. France (and all other EU states) should use Minimum Service Laws to protect overflights during ATC strikes as they do in Greece, Italy and Spain.

Last week, Ryanair delivered its ‘Protect Overflights: Keep EU Skies Open’ petition to EU Commission President, Ursula von der Leyen’s office, having collected more than 1.1 million signatures from fed-up passengers demanding that the EU Commission protect overflights and EU citizens’ freedom of movement during repeated ATC strikes. Despite this, EU Commission President, Ursula von der Leyen, has unsurprisingly done nothing to protect these passengers as hundreds more EU overflights are cancelled again due to the French ATC strike taking place today and tomorrow.

We call on the EU Commission, under Ursula von der Leyen to:

– Respect the strike rights of ATC unions, but

– Protect 100% of overflights (like Greece, Italy & Spain) during national ATC strikes

– If ATC strikes require cancellations, then allocate these to domestic/short-haul flights to/from the affected State

– Enforce binding arbitration for ATC disputes before strike action

– Require a 21-day notice of strike action

– Require a 72h notice of employee participation in ATC strikes to minimise passenger disruption

A Ryanair spokesperson said:

“Last week, Ryanair delivered our ‘Protect Overflights: Keep EU Skies Open’ petition to EU Commission President, Ursula von der Leyen’s office, having collected more than 1.1 million signatures from fed-up passengers demanding that the EU Commission protect overflights and EU citizens’ freedom of movement during repeated ATC strikes.

It is utterly unacceptable that Ursula von der Leyen is ignoring these more than 1.1 million passengers, who are sick and tired of having their overflights cancelled at short notice due to repeated ATC strikes. As a result, hundreds more overflights are being disproportionately cancelled by yet another French ATC strike taking place today, 5^th and tomorrow, 6^th June.

It is completely impermissible that ATC strikes can result in the cancellation of thousands of EU passengers’ flights, while France and other EU Member States use Minimum Service Laws to protect their domestic flights. If ATC unions insist on striking, which is their right, then they should cancel flights to/from the affected State and protect overflights, not cancel EU overflights from Germany, Spain, Italy, the UK.

The EU Commission must now take urgent action and insist that all States protect overflights during ATC strikes as is already done in Greece, Italy and Spain.”