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Ryanair Has Seen Profits Fall by 29%

Ryanair yesterday reported a full-year profit of €1.02bn (excl. Lauda). Strong traffic growth, up 7% to 139m, was offset by a 6% decline in fares. Strong ancillary growth (+19%) was offset by higher fuel, staff and EU261 costs.


Full-year Results (IFRS)* Mar. 31, 2018 Mar. 31, 2019 % Change
Guests 130.3m 139.1m +7%
Load Factor 95% 96% +1%
Revenue €7.15bn €7.56bn +6%
PAT €1.45bn €1.02bn -29%

“As previously guided, Ryanair (excl. Lauda) reports a full year after tax profit of €1.02bn. Short-haul capacity growth and the absence of Easter in Q4 led to a 6% fare decline, which stimulated 7% traffic growth to over 139m (142m guests incl. Lauda). Ancillary sales performed strongly up 19% to €2.4bn, which drove total revenue growth of 6% to €7.6bn, ” said Ryanair’s Michael O’Leary.

Higher oil prices and lower fares have seen a wave of EU airline failures including Primera (UK & Spain), Small Planet, Azur and Germania (Germany), Sky Works (Switz.), VLM (Belgium), Cobalt (Cyprus), Cello & Flybmi (UK) and WOW (Iceland). Flybe (UK) was sold, while both Alitalia and Thomas Cook airline are currently for sale.

Ryanair closed unprofitable bases in Bremen & Eindhoven and we cut aircraft numbers in Niederrhein, Hahn and the Canary Islands. Norwegian has closed multiple bases (many where they compete with Ryanair), including Rome, Las Palmas, Palma, Tenerife, Edinburgh & Belfast, and they will cut their Dublin base from 6 to 1 aircraft in October. Wizz (Poznan), Lufthansa (Dusseldorf) and EasyJet (Oporto) have also announced base cuts and/or closures in recent months. We expect further consolidation and airline failures in winter 2019 and again into 2020 due to over-capacity, weaker fares, and higher oil prices particularly among those airlines who are significantly unhedged, or unable to hedge.

Shares in the airline fell by five percent following the release of the results, to €10.2 per share.

Ryanair is delaying deliveries of five of the Boeing 737 Max planes, which have been grounded because of two fatal crashes, but said it had the “utmost confidence” in the aircraft.

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