European low-cost airline posts record half-year profit

Ryanair carried a record number of passengers over the summer and says its budget airfares will attract even more customers as Europe slips into recession.

The low-cost carrier posted its biggest half-year profit on Monday, earning 1.37 billion euros ($1.36 billion) in the six months ending in September. This surpassed its previous record of 1.15 billion euros ($1.14 billion) in 2019.

Air carried 95.1 million passengers during the period, compared to 39.1 million a year ago. This is 11% higher than the same period in 2019 before the coronavirus pandemic.

The company now expects to carry 168 million passengers in the 12 months to March 2023 – 1.5 million more than its previous forecast and 13% more than the year before the pandemic. The company’s shares rose 3.7% in Dublin, Ireland.

Ryanair 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 low-cost airline EasyJet.

Ryanair CEO Michael O’Leary said rivals’ cuts to fleets and passenger capacity had created “huge growth opportunities” for the Irish carrier, which has seen its market share “increase” in key European markets.

“Millions of passengers are switching to flying Ryanair and we suspect this will continue,” O’Leary said in a video posted on the company’s website.

He said concerns about the impact of recession and inflation on the company’s business were “exaggerated”.

“People don’t stop flying during recessions, but they become much more price sensitive. Ryanair grows stronger in a recession because we have a huge cost advantage over our competitors, that cost advantage is increasing and people becoming more price sensitive turn to us,” he added.

The strong gains mean the company will reverse pandemic pay cuts for more than 90% of its pilots and cabin crew starting next month – earlier than planned. “These long-term pay arrangements 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 over the next year could be hampered by Boeing’s “continued inability to meet its delivery schedule,” according to O’Leary.