Ryanair Shares Rise After Budget Carrier Lifts FY Passenger Traffic Guidance

By Scott Kanowsky 

Investing.com -- Irish-listed shares in Ryanair Holdings PLC (IR:RYA) rose on Monday after the budget carrier raised its expectations for full-year passenger traffic.

The Swords-based airline said it now estimates that 168 million people will board its flights during its 2023 fiscal year, up from a previous guidance of 166.5 million. It is also 13% higher than its pre-COVID levels.

Ryanair cited "strong" forward bookings heading into the key Christmas travel season, as well as hopes that annual fares will come in ahead of 2019 figures in the mid-to-high single-digit range.

But it warned that it is still cautiously eyeing events that may negatively effect passenger demand over the rest of the year.

"The recovery for the remainder of FY23 remains fragile and could yet be impacted by new Covid variants or adverse geopolitical events such as Ukraine," chief executive officer Michael O'Leary said in a statement.

Should these events be avoided, Ryanair predicts that annual profit before exceptional items will be in the range of €1.00B to €1.20B.

In the firm's first half, record second quarter traffic and strong peak summer fares - supported by soaring inflation - helped offset a slowdown in Easter demand in the first quarter stemming from the Ukraine conflict.

Total revenues jumped by more than 200% to €6.62B, helping push pre-tax income to €1.42B in the six months to September 30. In the same timeframe last year, Ryanair slumped to a loss of €100M.

"Concerns about the impact of recession and rising consumer price inflation on Ryanair's business model have been greatly exaggerated in recent months," O'Leary said.

Meanwhile, operating costs rose by 126% to €4.98B, driven by a sharp jump in fuel expenses. Despite the uptick, analysts at Citi called Ryanair's cost controls "strong" and should positively effect the group's share price.