Ryanair has trimmed its full-year profit projection as it cut fares in response to leading OTAs removing the airline’s flights from sale.
Profit in third quarter of the budget carrier’s financial year slumped to €15 million, compared to a “bumper” equivalent period in 2022 of €211 million, as higher fuel costs offset revenue gains despite a seven per cent rise in passenger numbers to 41.4 million.
“While traffic and fares were ahead of prior year, close-in Christmas/new year loads and yields were softer than previously expected as Ryanair lowered prices in response to the sudden but welcome removal of flights from OTA ‘pirate’ websites in early December,” the budget carrier said.
Average fares rose 13% to more than €42, thanks to a strong October mid-term and peak Christmas/new year travel “albeit that close-in loads and fares were softer than originally expected due to the sudden removal of Ryanair flights from many OTA ‘pirate’ websites in early December,” group chief executive Michael O’Leary said.
Any gain from Easter falling at the end of March is unlikely to offset “weaker than previously expected load factors and yields” in the late stages of the third quarter year and early into the current three months.
Europe’s largest airline still expects carryings for the 12 months to be up nine per cent to 183.5 million passengers, despite lower load factors in the winter third quarter and Boeing aircraft delivery delays.
Net profit for the first nine months was up 39% year-on-year to €2.19 billion.
However, O’Leary disclosed that the full year net profit guidance was being narrowed to a range of between €1.85 billion-€1.95 billion against the previous expectation of €1.85 billion-€2.05 billion.
“This guidance and the full year result remains heavily dependent upon avoiding unforeseen adverse events in Q4 such as the Ukraine war, the Israel-Hamas conflict and further Boeing delivery delays,” he said.
O’Leary confirmed recent agreements with OTAs Loveholidays and Kiwi, “which will see their customers book flights directly on the Ryanair.com website, but without inflating Ryanair prices for seats or ancillary products, thereby greatly improving the customer service offering available to both Loveholidays and Kiwi customers”.
A deal has also been reached with with travel and expense management firm SAP Concur to integrate its online travel tool with Ryanair’s website.
Corporate customers who book directly with Ryanair via Concur can now “benefit from significant efficiencies”, including automated expense and invoice management, in their booking and administration process, according to O’Leary.
“This, coupled with our low fares and high reliability. improves our offering to business travellers,” he added.
Ryanair is continuing to work closely with Boeing to minimise delivery delays and improve quality control in the wake of a panel blowing off an Alaska Airlines 737 Max 9 earlier in the month.
O’Leary said: “While the recent Max 9 grounding was a disappointing setback, we don’t expect it to affect the Max 8 fleet or the Max 10 certification.
“We visited Seattle in January and met with Boeing senior management. Boeing are increasing their quality assessment resources in Wichita and Seattle.
“We have run extra checks on our recent B737 deliveries and have noted improvements in quality with fewer delivery defects.
“However, Boeing have more work to do to improve quality, reduce delivery delays, and we fully support the initiatives that chief executive Dave Calhoun and chief financial officer Brian West are taking to improve Boeing’s performance and production.”
Ryanair expects continued consolidation of airlines in Europe over the next three years, with the takeover of ITA in Italy and Air Europa in Spain, as well as the sale of TAP Air Portugal and SAS.
This, in addition to Airbus A320 fleet groundings due to engine issues and the large backlog of aircraft deliveries “is likely to constrain short haul capacity in Europe for the next three years,” O’Leary predicted.
“These capacity constraints, combined with our significant cost advantage, including fuel savings, strong balance sheet, low-cost aircraft orders and industry leading resilience, will we believe underpin a decade of profitable growth opportunities for Ryanair as we expand our traffic to 300 million passengers per year by full year ’34.”
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