Ryanair raises its profit target after the Christmas holidays for low-cost airlines

Ryanair, Europe’s largest discount airline, raised its full-year earnings target after a stronger-than-expected holiday season, prompting gains for European airline stocks.

Revenue for the 12 months to March this year could reach 1.425 billion euros, up from a previous target of up to 1.2 billion euros, Ryanair said. The profit in the December quarter was almost 200 million euros, it said.

The airline’s shares gained as much as 7 percent in Dublin, its biggest intraday gain since April.

Discount rivals EasyJet and Wizz Air rose 7.1 percent and 10 percent, respectively, while full-service operators Air France-KLM and IAG, parent company of British Airways and Aer Lingus, rose nearly 4 percent.

Ryanair said bookings and fares for the holiday season benefited from pent-up demand as people were able to travel freely during this period for the first time in three years.

The company kept its full-year traffic forecast of 168 million passengers, suggesting the profit increase was mainly driven by people paying more.

“Based on this evidence, demand for short-haul holiday travel in Europe remains healthy and we are increasingly optimistic about the next earnings season,” said Bernstein analyst Alex Irving in a statement.

Ryanair warned that the forecast for the last quarter of the year “is heavily dependent on the avoidance of adverse events” such as: B. a worsening of the Covid-19 pandemic or a worsening of the war in Ukraine. Nevertheless, she expects a loss for the three months, since the lucrative Easter travel time falls in April.

The discount specialist said it had seen a “recent slowdown” in traffic and prices on outbound connections to the UK and Irish flights to British provincial cities, which will weigh on the quarter.

Data from aeronautical analysis firm Cirium shows that the number of flights out of Britain over the festive period was 22 per cent below pre-coronavirus levels, despite Christmas Day itself flying 6 per cent more flights than in 2019.

Ryanair shares closed Thursday up 6.77 percent at €13.70, the strongest performer on the Iseq.

It lost 20 percent in 2022, its worst performance since 2018.

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