Ryanair carried a record number of passengers over the summer and says its budget friendly airfares will attract even more customers as Europe falls into a recession.
The low-cost carrier posted its highest ever half-year profit on Monday, earning €1.37 billion ($1.36 billion) for the six months through September. That beat its previous record high of €1.15 billion ($1.14 billion) in 2019.
It carried 95.1 million passengers during the period, up from 39.1 million a year ago. That’s 11% higher than the same period in 2019 before the coronavirus pandemic hit.
Ryanair (RYAAY) now expects to carry 168 million passengers in the 12 months through March 2023 — 1.5 million more than its previous forecast and 13% higher than the year before the pandemic. The company’s stock jumped 3.7% in Dublin.
Ryanair has emerged from the coronavirus pandemic stronger than ever, even as several of its competitors went bankrupt or needed government-backed bailouts. It was also able to avoid the staff shortages that plagued many of its rivals over the summer, including budget airline EasyJet.
Ryanair CEO Michael O’Leary said cuts by rivals to fleets and passenger capacity have created “enormous growth opportunities” for the Irish carrier, which has seen its market share “surge” across major European markets.
“Millions of passengers are switching to flying Ryanair and we suspect that will continue,” O’Leary said in a video posted on the company’s website.
He said that concerns about the impact of recession and inflation on Ryanair’s business were “overblown.”
“People don’t stop flying during recessions, but they become much more price sensitive… Ryanair grows more strongly in a recession because we have a huge cost advantage over our competitors, that cost advantage is widening, and people becoming more price sensitive turn to us,” he added.
The strong earnings mean the company will reverse pandemic pay cuts for over 90% of its pilots and cabin crew from next month — earlier than planned. “These long-term pay agreements with the vast majority of our people have now delivered fully restored pay 28 months earlier than previously agreed,” O’Leary said.
While Ryanair has recovered from the pandemic faster than much of the aviation industry, its growth next year could be hampered by Boeing (BA)’s “continuing inability to meet its delivery schedule,” according to O’Leary.
The planemaker has promised to deliver all of the 51 “Gamechanger” 737 aircraft Ryanair has ordered before next summer, but O’Leary thinks there’s a growing risk of “slippage” with these deliveries.
Known for his forthright manner, the airline boss described Boeing management as “headless chickens” earlier this year in a scathing criticism of aircraft delays.
Despite the strong results, O’Leary said Ryanair’s recovery remains “fragile” and “prone to shocks” from new Covid variants or the war in Ukraine.