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Ryanair announces profit jump and predicts cheaper-than-expected summer fares

Ryanair Chief Executive Officer Michael O'Leary speaks to journalists during a media conference in Brussels, Thursday, July 1, 2021.
Ryanair Chief Executive Officer Michael O'Leary speaks to journalists during a media conference in Brussels, Thursday, July 1, 2021. Copyright Francisco Seco/Copyright 2021 The AP. All rights reserved
Copyright Francisco Seco/Copyright 2021 The AP. All rights reserved
By Eleanor Butler
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Yearly earnings for the budget airline are at a record level despite rises in fuel prices, higher staffing costs and delivery delays.

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Ryanair has revealed an after-tax profit of €1.92 billion in the year to March, an annual jump of 34%.

The total surpasses the previous annual record of €1.45 billion, made in the year to March 2018, and sits ahead of the €1.905 billion predicted by company analysts.

Ryanair's bottom line was boosted by a 9% increase in passenger traffic, combined with a 21% rise in the average fare price.

Despite this jump in consumer costs, the airline said it is continuing to reap a "competitive advantage" by keeping fees lower than its EU competitors.

Two weeks ago, CEO Michael O'Leary announced that summer fares would be likely to be lower than the 5%-10% rise predicted in late April.

While pricing could change, he said, peak tariffs were set to be "flat to modestly ahead" of those seen last summer.

"It is a bit surprising that pricing hasn't been stronger and we're not quite sure whether that's just consumer sentiment or recessionary feel around Europe but we still see peak travel demand certainly through July and August being strong," O'Leary said in a presentation to investors.

"And if we have to discount or cut fares to fill to 94% load factor in April, May and June then so be it," he added.

Although Ryanair reported strong earnings, the year was not without its challenges.

The airline saw higher staff expenses and noted a 32% increase in fuel costs, to €5.14 billion.

Delivery delays also ate into profits, notably linked to the Boeing manufacturing crisis.

Ryanair said it would be short of 23 Boeing 737s that were due to be delivered by the end of July.

"We continue to work closely with Boeing CEO (Dave Calhoun), CFO (Brian West) and the new Seattle management team to improve quality and accelerate B737 aircraft deliveries," Ryanair announced in an earnings statement.

"There remains a risk that Boeing deliveries could slip further," the airline added.

Contingent on these deliveries, Ryanair expects to increase its traffic by 8% in the coming year, targeting between 198 and 200 million passengers.

The firm said that it is too early to provide a profit expectation for the period, warning that conflicts in Ukraine and the Middle East could negatively affect the total.

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