Ryanair has warned of a “fragile” recovery in air passenger numbers after Russia’s invasion of Ukraine and the Omicron coronavirus variant pushed it to a loss of 355 million euros for the financial year.
The Irish airline would aim for a ‘return to reasonable profitability’ in the financial year to March 2023, it said on Monday, after losing 1.4bn euros (£1.2bn) during the first two fiscal years affected by the pandemic.
Airlines are clinging to returning passengers after two years of travel restrictions. There were high hopes for big revenue in the 2022 summer holiday season after many countries lifted bans on tourism, but the ripple effects of Russia’s invasion of Ukraine and the Staffing difficulties have clouded the outlook for airlines.
Michael O’Leary, Ryanair’s chief executive, said “we hope to return to reasonable profitability” over the coming year and highlighted “pent-up demand” despite the uncertainty. The “recovery is strong but fragile,” he said. “Hopefully we’ll have a great summer.”
Russia’s invasion of Ukraine and the rapid spread of the Omicron variant “immediately damaged bookings and close returns for peak Christmas and Easter travel periods,” O’Leary said.
Ryanair’s revenue tripled to €4.8 billion in the year to 31 March 2022 compared to the first year of the coronavirus lockdown.
The airline expects to carry 165 million passengers in the current financial year, up from 97 million in the year to March, and above its peak of 149 million passengers in the years before Covid-19.
Still, the company said ticket prices in the current financial quarter “continue to need a boost” with lower prices to attract more customers. Airlines’ ability to attract customers at higher prices is expected to be affected in the coming months by the cost of living crisis, with families having less money to spend after covering rising fuel prices and foodstuffs.
Still, O’Leary said the company was better positioned than its competitors and would expand its market share, opening 15 new bases and more than 700 new routes this summer. Fares were higher than in 2019 for peak season flights, he said. “There are a lot of capacity reductions and I hope we are going to be the beneficiaries of that.”
Ryanair is not suffering from the recruitment problems faced by its rivals pending security clearances, it said, although it is indirectly affected by “pinch points” at airports: “In Dublin, Berlin, there are big security queues, where they are struggling to get low-wage frontline staff back to work.
O’Leary said: ‘We have done everything we can during Covid to keep everyone employed, we have kept all pilots and cabin crew up to date… We have not laid off people and are not trying to ‘hire in the resume where background checks take time.’
“From our perspective – pilots, cabin crew, engineers, we’re in good shape, there’s plenty of flexibility to hire anyone on the continent, but the UK is inconvenient after Brexit.”
Ryanair struck a deal with unions to cut wages through much of the pandemic, to preserve jobs, and O’Leary said they were ‘entering a three-year wage restoration period’, although that he warned: “Covid is not quite over yet. Passenger volumes are back, but prices are not yet. »
Pilots’ union Balpa said they had “made huge sacrifices to help the business through the Covid crisis”, and said that with a return to profits, they “now need to see management recognize their loyalty “.
O’Leary said he feared his rivals had “talked” about the prospects of a strong summer, and that caution should be exercised ahead of winter due to the possibility of a new variant of coronavirus or a deterioration of the global economy in a global inflationary environment. pressures.