DUBLIN—Ryanair on Monday reported its first quarterly profit since before COVID-19, but downgraded its annual forecast to a loss of up to 200 million euros ($231 million) on plans to sell discounted tickets over the winter and higher fuel costs.
Europe’s largest budget airline, which operated more flights this summer than any European rival, posted a profit of 225 million euros for the three months to the end of September, marking its first quarterly profit since October–December 2019.
But the Dublin-based airline said it expected a loss of between 100 million and 200 million euros for the financial year that ends on March 31.
While that is better than the 815 million euro loss posted in the previous year, it is a downgrade from its July forecast of “somewhere between a small loss and breakeven.”
“There is no doubt that the remainder of the fiscal year will be challenging, the winter will be tough,” Group Chief Executive Michael O’Leary said in a video presentation.
But keeping prices low and passenger numbers high over the winter will “set us up strongly for a very strong recovery” in passenger numbers and ticket prices into the summer of 2022, he said.
The number of empty seats per plane would shrink from around 20 percent to under 10 percent by next summer while yields, or fare levels, will return to pre-COVID levels “if not better”, O’Leary said.
The airline expects to return to profitability in the year ending March 2023, he said.
Ryanair shares briefly dropped more than 4 percent to 16.2 euros after what Goodbody stockbrokers described as a “slight miss” and a more cautious outlook statement than expected.
The shares recovered most of the losses to trade down 0.6 percent by 09:25 GMT at 16.85 euros. O’Leary was due to brief investors in a call at 10:00 GMT.
Ryanair carried 39.1 million passengers in the six months ended September, more than double the number in the period last year but 54 percent fewer than the same months in 2019.
Ryanair said it would fly around 10 million passengers per month over the winter and “just over” 100 million in the year to March.
It flew 149 million passengers a year before the pandemic and Chief Financial Officer Neil Sorahan said it expected to fly a record 165 million passengers next year.
O’Leary, who has said the pandemic offers the best growth opportunities of his three-decade career, reiterated a forecast that Ryanair would fly 225 million passengers a year by 2026.
Ryanair reported an after-tax loss of 48 million euros for the six months to September, which includes a 273 million loss in the first quarter. A company poll of analysts had forecast a loss of 43 million euros for the six months.
By Conor Humphries