In a surprising turn of events, Ryanair cuts profit forecastfor the fiscal year ending March 31, citing a sudden halt in flight sales by certain online travelagents in December. The unexpected move led the airline to slash fares in a bid to fill seats, as costs per passenger saw a slight increase. Ryanair, known for its longstanding battles against online platforms over alleged unauthorized charges, found itself caught off guard when these agents ceased selling its tickets.
As Europe's largest airline in terms of passenger numbers, Ryanair now anticipates an after-tax profit ranging between 1.85 billion and 1.95 billion euros ($2 billion to $2.1 billion). This adjustment marks a decrease from the earlier November projection of 1.85 billion to 2.05 billion euros. Nevertheless, even with the revision, the forecasted figures still surpass the airline's previous record of 1.45 billion euros set in 2018.
In a significant financial adjustment, Ryanair has revised its profit expectations for the fiscal year ending in March, citing the abrupt cessation of flight sales by several online travel agents in December. The airline responded to the sudden removal of its flights from platforms such as Booking.com, Kiwi, and Kayak by reducing fares to fill seats.
Ryanair now anticipates an after-tax profit in the range of €1.85 billion to €1.95 billion, a decrease from its November forecastof up to €2.05 billion. The airline also faced a considerable impact on profits due to a 35% surge in fuel costs, reaching €1.2 billion in the October–December quarter.
This development follows a prolonged dispute between Ryanair and online booking sites, with the airline pursuing legal action against Booking.com owner Booking Holdings and its subsidiaries, including Kayak, Agoda, and Priceline. A previous Irish High Court ruling had banned screenscraper Flightbox from aggregating Ryanair flight information for online travel agents.
Despite the challenges, Ryanair's Chief Financial Officer, Neil Sorahan, indicated that the impact of being removed from certain online agents' sites is expected to be temporary and is already diminishing. The forecasted after-tax profit, though adjusted, still exceeds the airline's previous record annual after-tax profit of €1.45 billion in 2018.
While the airline reported a notable 11% increase in passenger numbers to a record 105.4 million in the six months to September, it cautioned about potential delays in the delivery of new, more fuel-efficient Boeing 787 Max 8 aircraft, which could affect profits.
Ryanair also highlighted the significance of avoiding unforeseen adverse events, such as geopolitical conflicts, in determining its full-year result. Stay tuned for further updates as Ryanair navigates through these challenges in the aviation industry.
Ryanair faces a recalibration of profit expectations for the fiscal year ending in March, prompted by the unexpected cessation of flight sales from certain online travel agents. The airline's strategic response included fare reductions in December, as platforms like Booking.com, Kiwi, and Kayak abruptly removed its flights from their offerings.
Consequently, Ryanair now anticipates profits of up to €1.95 billion, a revision from the earlier forecast of up to €2.05 billion in November. Compounding the challenge, a substantial 35% surge in fuel costs during the October–December quarter contributed to the impact on profits. As the aviation industry grapples with evolving dynamics, Ryanair navigates a landscape marked by both external disruptions and internal adjustments.