Ryanair has announced 200 weekly flights and 17 new routes to/from Albania as part of its Winter 2023 schedule.
Albania will become the 37th country within Ryanair’s network, and will grant immediate access to key inbound tourism markets such as, Belgium, Czech Republic, France, Germany, Italy, Poland, Romania Sweden and the UK – whilst also providing competitive fares and increased connectivity for Albanians who want to visit home or friends and family abroad.
These exciting new Winter routes are only the beginning of what Ryanair can do to support the Albanian Government in delivering transformational growth within the tourism industry. Countries need major airlines of scale like Ryanair to deliver capacity growth –Ryanair has consistently and successfully demonstrated this in European economies which rely on tourism such as Spain, Italy, Ireland, Portugal, and Malta.
Ryanair’s new Albania Winter ‘23 schedule will deliver:
17 new routes – to destinations such as Brussels, Dusseldorf, London, Manchester, Milan, Paris, Prague, Rome and Stockholm
200 flights per week
An estimated 700,000 passengers to/from Tirana (>1.5m p.a.)
Over 1,000 local jobs
With its recent record order of 300 new Boeing 737-MAX-10s, Ryanair will grow to c. 800 aircraft by 2033 and is the only major airline which can deliver long-term meaningful growth in Europe. Ryanair will begin operations to/from Albania this Winter offering 200 weekly flights, giving European and Albanian holidaymakers unbeatable choices at the lowest fares in Europe.
Ryanair Holdings plc reported a Q4 loss of €154m but a full-year PAT of €1.43bn, compared to a PY loss of (€355m), due to strong FY traffic recovery, improving fares, industry leading cost base and advantageous fuel hedges.
Ryanair’s Michael O’Leary, said:
ENVIRONMENT:
“Passengers who switch to Ryanair (from EU legacy airlines) can reduce their emissions by up to 50% per flight. Over the past year, we made significant progress to become net carbon neutral by 2050. Our new, fuel efficient, B737 “Gamechangers” (4% more seats, but 16% less fuel) increased to 98 aircraft at year end, and we began to retrofit scimitar winglets on our B737NG fleet which will further cut fuel burn by 1.5%.
We are working hard to achieve ambitious 2030 goals of powering 12.5% of Ryanair flights with SAF. We have recently expanded our SAF partnerships with Neste (Schiphol), OMV (Austria, Germany and CEE) and Shell (in London and Dublin) by announcing a multi-year MOU with Repsol to supply Ryanair bases in Spain. Through A4E, and the EU, we are campaigning to accelerate reform of European ATC to eliminate avoidable flight cancellations/delays (something urgent in light of repeated French ATC strikes in Q1), which will substantially lower fuel consumption and CO₂ emissions. We urge all EU consumers to sign our “Protect Overflights” petition on www.ryanair.com.
Ryanair is Europe’s No.1 ranked EU airline for ESG by Sustainalytics[1]. During FY23, MSCI increased our ESG rating to ‘BBB’ (from ‘B’) and CDP reconfirmed Ryanair’s industry leading (‘B’) climate rating for 2023.
SOCIAL :
Ryanair’s commitment to maintaining jobs and keeping skills current through the 2-years Covid crisis, albeit with Govt. payroll support and temporary pay cut agreements with union partners (now restored, over 2 years sooner than planned), maximised our crew jobs security while our competitors cut thousands of jobs. It also meant that Ryanair was fully staffed to operate its S.22 schedule, while many competitors cancelled capacity (often at short notice) in the face of severe staff shortages. Following a strong H1 performance, Ryanair fully restored pay (some 28 months early) by agreement with our unions on new long-term multi-year pay agreements.
As Ryanair grows traffic to 225m p.a. by FY26 and 300m by FY34, our Group will create over 10,000 new jobs for highly paid pilots, cabin crew, and engineers. Over the past year we recruited and trained over 3,000 new crew members (incl. 1,000 pilot cadets). The Group opened new engineering facilities in Bergamo (Italy), Malta, Kaunas (Lith.) and Shannon (Ire.) and recently announced a €40m new Dublin maintenance centre (creating over 200 engineering jobs). These new facilities and fleet growth enables us to create cadet positions and apprenticeships for school leavers, bringing through the next generation of highly skilled aviation professionals. Ryanair Labs is actively recruiting IT & digital professionals to join our dev. teams in Dublin, Madrid, Porto and Wroclaw.
Ryanair’s strong S.22 operational resilience (despite multiple ATC delays/strikes, airport security/handling staff shortages) meant we delivered industry leading capacity recovery and OTP for our customers. This was reflected in FY23’s CSAT score of over 85%, with “crew friendliness” our top score (rated over 95%). This summer, in anticipation of further ATC disruptions, we have invested heavily in our operations (increased crew ratios, doubled the size of our ops centres, enhanced day-of-travel app. and we continue to improve customer comms.) to ensure that our passengers and crews continue to enjoy Ryanair’s industry leading OTP and reliability.
GOVERNANCE:
In recent months, 3 new NEDs (Eamonn Brennan, Elisabeth Köstinger and Anne Nolan) have joined the Ryanair Board. Our Chairman (Stan McCarthy) has also refreshed our Board Committees. Dick Milliken, having successfully overseen the rotation of external auditors (from KPMG to PwC) during FY23, has chosen not to seek re-election at the 2023 AGM in Sept. To facilitate experienced management of the Group, orderly succession and the onboarding of new NEDs, Louise Phelan has agreed to remain on the Board for one more year. Over the past year, Ryanair’s EU ownership has increased from 41% to 46% at year end.
GROWTH:
Ryanair’s market share has grown significantly in most EU markets as we operated 116% of our pre-Covid capacity in FY23. Most notable gains were recorded in Italy (from 27% to 40%), Poland (26% to 36%) and Ireland (49% to 58%). This summer we will operate our largest ever schedule (almost 2,500 routes with over 3,000 daily flights), capitalising on traffic restoration, and multi-year growth deals negotiated by our New Route teams. Structural EU capacity reductions following numerous EU airline failures or fleet reductions during Covid, high oil prices (discouraging weaker, unhedged, airlines from adding capacity), a shortage of aircraft (new & leased) and the return of Asian and American visitors to Europe (due to the very strong US$) means that while S.23 European short-haul capacity remains below pre-Covid levels, demand is notably robust. Forward bookings and air fares currently into S.23 are strong and we continue to urge all customers to book early to avoid rising “close-in” prices.
We expect European airlines will continue to consolidate over the next 2 years and it seems likely they will deploy capacity in a disciplined manner. The large backlog of OEM aircraft deliveries is likely to constrain capacity growth in Europe for at least 4 more years which confers a considerable growth premium on Ryanair’s remaining 110 B737 Gamechangers deliveries over the next 3 summers. Our widening unit cost advantage over all competitors, our fuel hedging, strong balance sheet and our very low-cost aircraft order book, as well as our proven operational resilience, creates enormous growth opportunities for Ryanair over the coming years.
FY23 BUSINESS REVIEW:
Revenue & Costs:
FY23 scheduled revenue grew over 160% to €6.93bn. Following a disappointing Q1 (when traffic was badly impacted by Russia’s invasion of Ukraine on 24 Feb. 2022), strong travel demand through the remainder of the year saw traffic rise 74% at higher fares (+10% on pre-Covid). Ancillary sales delivered a solid performance, generating just under €23 per passenger (€3.84bn). Total FY23 revenue rose 124% to €10.78bn. Total operating costs rose 75% to €9.20bn, driven by higher fuel costs (+113% to €3.90bn, offset by favourable fuel hedges and improved fuel burn as more Gamechangers entered the fleet), crew pay restoration and 74% traffic growth. Ex-fuel operating costs rose 54%, which was well below traffic growth, and unit costs (ex-fuel) were just €31 as Ryanair’s cost advantage over all other EU competitors widened substantially as we predicted it would. Our industry leading fuel hedging (over 80% hedged at approx. $64bbl) contributed significantly to the final FY23 profit outcome, saving the Group over €1.4bn.
FY24 jet fuel requirements are almost 85% hedged at approx. $89bbl (with a mix of forwards and caps) and 25% of H1 FY25 is covered at $77bbl. Just over 90% of FY24 €/$ opex is hedged at 1.08 and 38% of H1 FY25 is covered at 1.11. Our B-8200 “Gamechanger” order book is fully hedged at €/$ 1.24 which further lowers the cost of these new aircraft compared to many competitors who are engaged in expensive (and getting more expensive) leasing to grow their fleet even as interest rates are rising.
Balance Sheet & Liquidity:
Our balance sheet is one of the strongest in the industry with a BBB+ credit rating and €4.7bn gross cash at year-end, despite an €850m bond repayment in March 2023. Almost all the Group’s B737 fleet are owned and 99% are unencumbered, which significantly widens our cost advantage, as interest rates and leasing costs continue to rise for competitors. Thanks to our strong booking recovery, improving air fares and Boeing delivery delays, net cash at 31 Mar. was €0.56bn (compared to net debt of €1.45bn at 31 Mar. 2022), despite over €1.9bn capex. (Capex was c.€450m lower than expected due to Boeing delivery delays – now timed into FY24). Earlier this month Ryanair converted its unsecured €750m syndicated term loan into a revolving credit facility (at a lower margin) with an extended maturity to May 2028 (was 2024). Over the coming months we will repay a €750m maturing bond in Aug. and fund over €2.6bn capex (FY24 is the peak capex year under the “Gamechanger”order) while planning to retain a broadly flat net cash/debt position. We will continue to preserve cash to minimise financing costs as we face considerable annual aircraft capex of over €2bn p.a. from 2027 onwards.
AIRCRAFT ORDERS:
Earlier this month, Ryanair signed an agreement to purchase 300 new Boeing 737-MAX-10 aircraft (150 firm and 150 options), which is subject to AGM approval on 14 Sept. next. These, fuel efficient, aircraft have 228 seats (21% more than our B737NGs) and phased deliveries between 2027 and 2033. We expect 50% of the order will be used to replace older NGs, while the remainder will facilitate disciplined traffic growth to approx. 300m p.a. by FY34 (an 80% increase over FY23’s traffic). Apart from delivering significant revenue growth, the additional seats (coupled with greater fuel, carbon and noise efficiency) will further widen Ryanair’s considerable unit-cost advantage over all European competitor airlines. Given the strength of the Group’s balance sheet, our strong credit ratings and the 2-year gap between the delivery of the final B-8200 “Gamechanger” in late Dec. 2024 and the first MAX-10 in early 2027, we anticipate that capex will be funded primarily from internal resources (although the Group will remain opportunistic in its financing decisions).
As a result of Boeing’s recent B737 delivery disruptions, we expect to be short (up to 10) B-8200s for peak (June & July) S.23 schedules. To facilitate Boeing, and to assist their resumption of scheduled B-8200 deliveries this autumn, we will take delivery of aircraft through July (and possibly into Aug.). We hope and expect that Boeing will recover quickly from this recent delay to minimise its impact on our FY24 traffic growth and profitability.
OUTLOOK:
This year Ryanair hopes to grow traffic to approx. 185m (+10%), although Boeing’s recent delivery delays may push some of this growth into the lower yielding H2 and may reduce this target slightly. Our FY24 fuel bill will increase by over €1bn due to higher oil prices (despite our more fuel-efficient fleet). While we continue to enjoy a significant cost advantage over competitor airlines, we expect to record a modest increase in unit costs (ex-fuel) as annualised crew pay restoration, higher crew ratios this summer and increased enroute charges will not be fully offset by B737 Gamechanger deliveries in H1. To date, S.23 demand is robust, and peak S.23 fares are trending ahead of last year. Q1 fares, which benefitted from a strong Easter in April (and a very weak PY comparable due to Russia’s invasion of Ukraine), will be significantly higher than Q1 FY23.
Despite ongoing uncertainty over the timing of Boeing deliveries, almost 15% unhedged fuel, limited Q2 visibility and zero H2 fare visibility (normal at this time of year), we are cautiously optimistic that FY24 revenue will grow sufficiently to cover our €1bn higher fuel bill and still deliver a modest year-on-year profit increase. This guidance remains heavily dependent upon avoiding adverse events during FY24 (such as the war in Ukraine or further, repeated, Boeing delivery delays).”
Ryanair welcomed the EU General Court’s rulings on discriminatory State aid favoring Lufthansa and SAS over other EU airlines.
The German government granted a blockbuster €6 billion recapitalization aid package to Lufthansa, while the Swedish and Danish governments recapitalized SAS to the tune of €1 billion.
While the COVID-19 crisis caused serious damage to all airlines, many national governments, including Germany, Sweden and Denmark, rushed through discriminatory subsidy schemes for their former flag carriers, ignoring other airlines that contribute to the economy and the connectivity of the European Union. Ryanair appealed the European Commission’s approval of these illegal subsidies to the EU General Court in 2021.
The EU General Court found the European Commission made a number of egregious errors in its approval of the aid to Lufthansa, including ignoring Lufthansa’s dominance in Germany, and failing to assess whether Lufthansa could have obtained financing on the markets instead of obtaining distortive State aid from the German government. In the SAS judgment, the General Court found that the recapitalisation measure lacked conditions incentivising swift exit of the governments. Today’s judgments are a victory for the EU internal market and are damning of the European Commission’s head-in-the-sand approach to massive and discriminatory bailouts of ailing flag carriers by EU Member States with deep pockets.
Ryanair’s spokesperson said:
“One of the EU’s greatest achievements is the creation of a single market for air transport. The European Commission’s approval of theGerman recapitalisation aid to Lufthansa and the Swedish and Danish recapitalisation aid to SAS went against the fundamental principles of EU law. Today’s judgments confirm that the Commission must act as a guardian of the level playing field in air transport and cannot sign-off discriminatory State aid under political pressure by national governments. The Court’s intervention is a triumph for fair competition and consumers across the EU.
During the COVID-19 pandemic over €40bn in discriminatory State subsidies has been gifted to EU flag carriers. Unless halted by the EU Courts in line with today’s ruling, this State aid spree will distort the market for decades to come. Europe’s emergence from the COVID-19 crisis with a functioning single market depends on airlines being allowed to compete on a level playing field. Undistorted competition eliminates inefficiency and benefits consumers through low fares and choice. Unjustified subsidies, on the other hand, encourage ineffectiveness and will harm consumers for decades to come”.
Ryanair has announced it plans to order at least 150 Boeing 737-10 MAX 10 aircraft with options for 150 more.
The new aircraft will replace older Boeing 737-800s.
The 737-10 MAX 10 has not yet been certified.
Boeing released this statement:
Boeing and Ryanair announced Europe’s leading low-cost airline has selected the largest 737 MAX model to power its future growth with an order for up to 300 airplanes. The purchase agreement is the biggest in Ryanair’s history and includes a firm order for 150 737-10 jets and options for 150 more.
Image credit: Boeing
Ryanair has deployed a growing fleet of 737-8-200 airplanes to accelerate its post-pandemic recovery and meet strong travel demand. The 197-seat 737-8-200 model has helped the airline reduce fuel use and emissions by over 20% compared to the airplanes they are replacing. The new order adds the larger 737-10 variant, which offers Ryanair 228 seats and the best unit economics of any single-aisle airplan
Ryanair has confirmed that over 600,000 passengers have signed its “Protect Passengers: Keep EU Skies Open” petition calling on the EU Commission President Ursula von der Leyen to take immediate action to protect European citizen’s Freedom of Movement and overflights during French ATC strikes.
When Ryanair’s petition reaches 1 million signatures, the airline will submit it to the EU Commission and demand that President Ursula von der Leyen finally takes action to protect EU citizen’s Freedom of Movement when French ATC repeatedly strike.
Despite only launching just 5 weeks ago, Ryanair has already collected over 600,000 signatures from passengers who are sick and tired of having their travel plans cancelled at short notice due to French ATC strikes, and all because the EU Commission has failed to protect their right to the Freedom of Movement. EU citizens now understand that their travel plans are being disrupted unnecessarily by French ATC unions and are demanding action from the EU Commission.
In the first 4 months of 2023, there have been over 50 days of French ATC strikes (10 times more than all of 2022) which have forced Ryanair to cancel over 3,700 flights, cancelling over 666,000 passengers’ flights at short notice. France uses Minimum Service Legislation to protect French domestic flights, while EU overflights from Germany, Spain, Italy, the UK and Ireland are disproportionately cancelled. This is unfair and must change. Italy and Greece already protect overflights during ATC strikes and the EU Commission must now insist that France does likewise.
A Ryanair spokesperson said:
“We are overwhelmed by the support for our Protect Passengers: Keep EU Skies Openpetition withover 600,000 signatures already from passengers calling on EU Commission President Ursula von der Leyen to take immediate action to protect their Freedom of Movement and overflights by keeping EU skies open during repeated French ATC strikes. We are rapidly approaching the 1 million signatures we need to force the EU Commission to take action to protect overflights and EU citizens’ Freedom of Movement.
French ATC strikes are the No.1 risk to EU citizens’ travel plans this Summer and passengers are really starting to understand that the EU Commission is doing nothing to mitigate that risk and protect their Freedom of Movement. EU citizens are now signing our petition to demand action from the EU Commission to protect them and their family’s travel plans this Summer. The EU’s Single Market for air travel should not be repeatedly disrupted by tiny French ATC unions because the EU Commission fails to take action. It’s time to protect overflights during French ATC strikes as Italy and Greece already do. If French ATC unions insist to strike (as is their right) then cancel French flights and protect overflights.”
Top Copyright Photo: Ryanair Boeing 737-8AS WL EI-DWB (msn 36075) PMI (Ton Jochems). Image: 960450.
Ryanair issued this stated against the EU Commission and President Ursale von der Leyen:
On the 38th day of French ATC strikes in just 3 months, Ryanair has condemned EU Commission President, Ursula von der Leyen for her inexcusable failure to protect EU citizens/visitors’ fundamental right to the Freedom of Movement, by irresponsibly allowing EU skies to be closed repeatedly during French ATC strikes.
President von der Leyen has shown how little she cares about EU citizens/visitors and their rights by allowing over 627,000 Ryanair passengers’ flights in the first 3 months of 2023 alone to be cancelled at short notice due to French ATC strikes, disrupting travel plans, diminishing essential intra-European connectivity and damaging tourism. However, these passengers could easily be protected without impeding on French ATC unions’ right to strike with the following measures:
Protect French overflights during ATC strikes (using min services laws) like in Greece, Italy & Spain
Allow Europe’s other ATCs to manage flights over France while French ATC strike
Mandate that French ATC unions engage in binding arbitration before calling of strikes
Mandate advanced notification of strike participation
French unions can exercise their right to strike without being allowed to close the entire upper French airspace, as ATC unions in Spain, Italy and Greece avoid by protecting overflights. It is completely disproportionate and unfair that internal French flights are protected under Min. Services Legislation, but EU citizens/visitors’ overflights from Germany, Spain, Italy, the UK and Ireland are cancelled.
President von der Leyen and the EU Commission have a duty to protect EU citizens’ right to the Freedom of Movement. Ryanair is calling on EU passengers to sign itsProtect Passengers: Keep EU Skies Openpetition and demand that the EU Commission and President von der Leyen take immediate action to protect their rights as EU citizens.
A spokesperson for Ryanair said:
“Today, French ATC are striking for the 38th day in just 3 months with thousands more EU passengers having their flights to see friends and family unfairly cancelled at short notice. While we have no difficulty with French unions exercising their right to strike, we do expect President von der Leyen to do her job and defend and protect EU citizens/visitors’ fundamental right to the Freedom of Movement, which she and her College of Commissioners have inexplicably failed to do.
It is completely disproportionate and unfair that the French Govt can use Min. Services Legislation to protect internal French flights but force the cancellation of flights over France. President von der Leyen should protect EU citizens/visitors on non-French flights overflying French Airspace from Germany, Spain, Italy, the UK and Ireland. The EU’s Single Market for air travel and overflights should not be repeatedly cancelled because the EU Commission fails to take action.
Ryanair is calling on EU passengers to join our call on President von der Leyen and sign our Protect Passengers: Keep EU Skies Open petition to demand that the EU Commission take action to protect their rights as EU citizens.”
In other news, Ryanair has announced plans to expand its aircraft maintenance facility at Dublin Airport with the construction of a new state-of-the-art 4 bay hangar – a €40m investment and creating over 200 new highly paid and high skilled jobs for engineers and mechanics.
This new 120,000sq foot hangar will be one of the most environmentally friendly hangars in the EU with gas absorption heat pumps reducing energy use by up to 35%. The hangar will facilitate the heavy and line maintenance of Ryanair’s fleet at Dublin Airport as the airline grow its fleet to 600 aircraft with the delivery of more efficient new technology 737-8200 “Gamechanger” aircraft, which carry 4% more passengers while burning 16% less fuel and emitting 40% less noise.
Construction of the new facility will commence in Q4 of 2023 with aircraft maintenance operations planned to start in Q2 2025.
Ryanair has announced that it has expanded its partnership with the world leading sustainable aviation fuel (SAF) supplier, Neste, to power its full schedule of Amsterdam Airport Schiphol (AMS) flights with a 40% SAF blend from April 1, 2023.
This significant increase in SAF use represents the latest milestone development in Ryanair’s ambitious goal of operating 12.5% of flights with SAF by 2030 and further supports Ryanair’s Pathway to Net Zero by 2050 decarbonisation goals, reducing greenhouse gas emissions by 32%.
Ryanair Holdings plc today (January 30, 2023) reported a Q3 PAT of €211m, compared to a pre-Covid (FY20) Q3 PAT of €88m. Strong pent-up travel demand over the Oct. mid-term and peak Christmas/New Year holiday season (with no adverse impact from Covid or the war in Ukraine) stimulated strong traffic and fares across all markets.
31 Dec. 2021
31 Dec. 2022
Change
Customers
31.1m
38.4m
+24%
Load Factor
84%
93%
+9pts
Revenue
€1.47bn
€2.31bn
+57%
Op. Costs
€1.59bn
€2.15bn*
+36%
Net (Loss)/ PAT
(€96m)
€211m*
n/m
EPS
(€0.08)
€0.18
n/m
* Non-IFRS financial measure, excl. €9m except. unrealised mark-to-market loss (timing unwind) on jet fuel caps.
During Q3:
Traffic jumped 24% to 38.4m (+7% pre-Covid in FY20).
Q3 fares rise 14% on pre-Covid levels.
Pay cuts restored by agreement in Dec. (28-months early) for over 95% of crews.
YTD unit costs (ex-fuel) of just €30.
84 B737-8200 “Gamechangers” delivered at 31 Dec. Total fleet of 523 aircraft.
230 new routes announced for FY24 (total 2,450 routes).
Strong market share gains in Italy, Poland, Ireland & Spain.
H1 FY24 fuel hedging increased to 60% cover at $90bbl.
Ryanair’s Michael O’Leary, said:
ENVIRONMENT:
“Our investment in new fuel efficient, greener, B737 aircraft continued in Q3 with our Gamechanger fleet (4% more seats with 16% less fuel) increasing by 11 to 84 aircraft. In Q3 we began to retro-fit scimitar winglets on our 409 B737-800NG owned fleet (a $200m+ investment) which will further reduce fuel burn by 1.5%.
Sustainable aviation fuel (SAF) will play a key role in reducing our CO₂ per pax/km by 10% to 60 grams by 2030, when hopefully 12.5% of our flights will be powered with SAF. We continue to invest to accelerate supply of SAF. Building on our successful partnerships with Neste (Schiphol) and OMV (Austria, Germany and CEE), Ryanair signed an MOU in Q3 with Shell to supply 360,000 tonnes of SAF between 2025 – 2030 (saving 900,000 tonnes of CO₂), at Ryanair’s larger bases in London and Dublin. In Dec. we hosted a Sustainability Day with our partner Trinity College Dublin (“TCD”). This event brought together industry leaders, scientists and engineers (incl. Boeing, MAG, Safran, Shell Aviation, Ryanair, TCD academics and PhD students) who presented to an audience of investors, politicians, regulators and financial institutions on Ryanair’s (and the aviation industry) path to net carbon zero by 2050. Through A4E, and the EU, we are campaigning to accelerate reform of European ATC to eliminate needless flight delays, which will substantially reduce fuel consumption and CO₂ emissions.
Passengers who switch to Ryanair (from high-fare EU legacy airlines) can reduce their emissions by up to 50% per flight. In recognition of our progress to date and our industry leading (CDP ‘B’) climate rating, MSCI increased Ryanair’s ESG score to ‘BBB’ (was ‘B’) and Sustainalytics[1] ranked Ryanair the No.1 airline in Europe for ESG performance. Earlier this year, we submitted Ryanair’s commitment letter to SBTi[2] and we will work with them over the next 2 years to verify our ambitious targets to become net carbon zero by 2050.
SOCIAL:
Pay restoration:
At the outset of the Covid-19 pandemic, Ryanair and its union partners negotiated agreements to protect crew jobs via temporary pay cuts which were to be gradually restored from 2022 to 2025. These agreements successfully ensured crew jobs security through the 2 years Covid pandemic, as Ryanair maintained not only the jobs but also the licences of our crews. This investment positioned Ryanair as the most prepared airline for the post-Covid traffic recovery. By keeping our crews current, and recruiting early, Ryanair avoided the crew shortages which caused so many competitor cancellations and disruptions in S.22. In Nov., following a strong H1 performance, Ryanair agreed to fully restore pay (28 months early) for over 95% of crews covered by new long-term pay agreements in the Dec. payroll. We remain available to conclude agreements (on similar terms) with the tiny minority of unions representing less than 5% of our crews who have so far failed to reach agreement on accelerated pay restoration.
Training:
As Ryanair grows traffic to 225m p.a. by FY26 our Group airlines will create thousands of high paid jobs for aviation professionals. S.23 resourcing is well advanced with over 1,000 cadets enrolled in our pilot training schools and new cabin crew courses underway. Ryanair Labs recently launched a campaign to recruit 150 IT professionals to our labs teams in Dublin, Madrid, Porto and Wroclaw. During FY23 we announced new engineering maintenance facilities in Malta, Kaunas (Lith.) and Shannon (Ire.) and expect to add further capacity in the coming months. These new facilities will enable us to create more cadets and apprenticeships for young school leavers, bringing through the next generation of highly skilled aviation professionals.
CSAT:
Building on strong operational resilience and reliability during S.22 (despite numerous ATC delays/strikes and lengthy airport security queues – particularly in Q1), Ryanair continued to deliver industry leading service for our customers over the busy Oct. school mid-term and peak Christmas/New Year travel period. This was reflected in Q3’s CSAT score which rose to 86% (83% for H1), with crew friendliness our top score (rated at 95%).
GROWTH:
Ryanair secured strong market share gains in key EU markets as we operated 112% of our pre-Covid capacity during the first 9 months of FY23. Most notable gains were in Italy (from 26% to 40%), Poland (27% to 38%), Ireland (49% to 58%) and Spain (21% to 23%). Our Routes team continue to negotiate traffic recovery growth deals with airport partners as competitors struggle to recover capacity (down as much as 20% this winter) and grapple with rising costs. Up to the end of Q3, Ryanair has taken delivery of 84 B737 Gamechangers and we’re planning FY24 growth based on 124 new aircraft for peak S.23, although there is a risk (despite recent Boeing production improvements) that some of our Gamechanger deliveries could slip. Over 230 new routes (total 2,450 with 3,200 daily flights) have been announced for FY24. With Asian tourists now returning and a strong US$ encouraging Americans to explore Europe, we’re seeing robust demand for Easter and summer 2023 flights. We therefore encourage customers to book early on www.ryanair.com to secure the lowest fares as we expect these will sell out early.
Over the past 3 years, numerous airlines went bankrupt and many legacy carriers (incl. Alitalia, TAP, SAS and LOT) significantly cut their fleets and passenger capacity, while racking up multi-billion-euro State Aid packages. These structural capacity reductions have created enormous growth opportunities for Ryanair. These opportunities, combined with our reliability, lowest (ex-fuel) unit costs, strong fuel and US$ hedges, fleet ownership and strong balance sheet, ensures that the Group is well placed to grow profitability and traffic to 225m p.a. by FY26.
Q3 FY23 BUSINESS REVIEW:
Revenue & Costs:
Q3 scheduled revenue increased almost 85% to €1.45bn due to strong travel demand at higher fares (+14% over pre-Covid), especially during the Oct. mid-term and the peak Christmas/New Year holiday season. Ancillary revenue delivered another solid performance, generating over €22.50 per passenger. Total Q3 revenue rose 57% to €2.31bn. Operating costs increased 36% to €2.15bn, driven by higher fuel costs (+52% to €0.90bn, offset by improved fuel burn as more Gamechangers enter the fleet), crew pay restoration and 24% traffic growth. Ex-fuel operating costs rose by only 26%, marginally ahead of traffic and year to date unit costs (ex fuel) are just €30 per passenger. Other income/expenses benefitted from a weaker US$ in Q3 reversing H1’s negative currency charge.
Our jet fuel requirements are 88% hedged at approx. $71bbl for the remainder of FY23 and H1 FY24 cover has recently increased to 60% at $90bbl (FY24: 57% at $92bbl). Forex is also well hedged with over 80% of Q4 FY23 €/$ opex hedged at just under 1.15 and approx. 60% of FY24 at 1.08. Our Boeing order book is fully hedged at €/$ 1.24 out to FY26. This strong hedge position helps insulate Ryanair from spikes in fuel prices and gives our Group airlines a significant cost advantage over our EU competitors for the remainder of FY23 and into FY24.
Balance Sheet & Liquidity:
Ryanair’s balance sheet is one of the strongest in the industry with a BBB (positive) credit rating (S&P and Fitch) and €4.07bn gross cash at quarter end. Almost all of the Group’s fleet of B737s are owned and c.96% are unencumbered which widens our cost advantage as interest rates and leasing costs continue to rise for competitors. Net debt at 31 Dec. was €0.96bn (from €1.45bn at 31 Mar.), despite €1.27bn capex. Our focus over the coming year is the repayment of €1.60bn of maturing bonds (€850m in Mar. and €750m in Aug.) and funding peak capex while aiming to return our balance sheet to a broadly zero net debt position by April 2024.
OUTLOOK:
While bookings continue to be closer-in than in spring 2020 (pre-Covid), we have reasonable visibility for the remainder of FY23, with FY traffic guided at 168m. Ryanair expects Q4 to be loss making due to the absence of Easter from March. As announced on 4 Jan., we are guiding FY23 PAT (pre-exceptionals) in a range of €1.325bn – €1.425bn (previously €1.00bn – €1.20bn). This guidance remains heavily dependent upon avoiding adverse events in Q4 (such as Covid and/or the war in Ukraine).”
[1] Sustainalytics – a leading independent ESG & corporate governance research, ratings & analytics firm.
[2] Science Based Targets initiative – a collaboration between CDP, the United Nations Global Compact, World Resources Institute & the Worldwide Fund for Nature. It helps companies to set emission reduction targets in line with climate science & the Paris Agreement goals.
Top Copyright Photo: Ryanair Boeing 737-800 WL EI-GXL (msn 44857) BFI (Brian Worthington). Image: 959711.
Ryanair has started to add Aviation Partners Boeing Split Scimitar winglets to its over 400 Boeing 737-800 fleet. EI-DLY is the first to get the retrofit.
Ryanair made this announcement:
EI-DLY is the first Boeing 737-800.
Following a $175 million agreement with Aviation Partners Boeing (APB), Ryanair on January 23 installed Split Scimitar Winglets to the first of over 400 of its Boeing 737-800 Next Generation aircraft. This modification will improve aircraft fuel efficiency by up to 1.5%, reducing Ryanair’s annual fuel consumption by 65 million liters and carbon emissions by 165,000 tons.
As Ryanair grows to carry 225 million passengers by FY26, this initiative will further the airline’s target of net-zero by 2050.
Ryanair’s CEO Michael O’Leary has said he was hopeful of receiving 40 to 45 of 51 Boeing MAX aircraft due for delivery by the summer season, up from a previous forecast of 40 according to Reuters.
Top Copyright Photo: Ryanair Boeing 737-8 MAX 8 (200) EI-HGL (msn 65081) STN (Antony J. Best). Image: 959901.
