Ryanair says consumers are trading down not sitting out cost of living squeeze

Some Ryanair and Aer Lingus flights are already fully-booked for the Christmas period. Photo: Brian Lawless

Some Ryanair and Aer Lingus flights are already fully-booked for the Christmas period. Photo: Brian Lawless

Donal O'Donovan Twitter Email

November 07 2022 07:06 AM

Ryanair says profits, passengers numbers and average fares all exceeded pre-Covid levels in the in the first half of its financial year.

Chief financial officer Neil Sorohan said passenger numbers for the October mid-term break and bookings into Christmas suggest passengers are continuing to travel, shrugging off the talk of economic recession, with unemployment low across Europe underpinning demand in the economy even as prices get squeezed.

"People have money in their pockets but they are trading down to the likes of ourselves, Aldi and Ikea,” he said.

The airline now expects to fly 168 million people in the year that began April 1, up from 166.5 million previously.

Ryanair Holdings today reported a half-year after tax profit of €1.37bn, compared to a pre- Covid profit of €1.15bn in the same period of its 2020 financial year.

Summer fares were up 14pc versus the most recent pre-Covid summer pricing and passenger traffic hit a record for the airline thanks to more and bigger planes.

The airline took delivery of 73 new Boeing 737-8200 “Gamechangers” aircraft in the first half of the year with another 51 expected to be delivered ahead of next summer’s peak season, although the airline said it expects Boeing will only deliver 10 or 12 of the contracted 21 of those Gamechangers due before Christmas this year.

It has ramped up recruitment to staff the new planes – including recruiting 1,000 new entrants to its pilot cadet school, additional cabin crew and aircraft maintenance apprentices.

Ryanair announced on Monday that full pay restoration for staff who agreed a programme of temporary pay cuts during Covid will be brought forward again to December this year, having already been brought forward 24 months to April 2023, for all crews covered by the long-term agreements between the airline and unions.

These crews will now receive full pay restoration in the Christmas payroll this year instead of in 2025 as originally planned for.

Ryanair said it has written to the minority of unions representing the less than 10pc of pilots and cabin crew who have so far failed to reach agreements on accelerated restoration urging them to return to negotiations.

"These long-term pay agreements with the vast majority of our people have now delivered fully restored pay 28 months earlier than previously agreed, and they will also deliver annual pay increases from 2024 until 2026 as we create thousands of new well-paid crew jobs and grow traffic to 225m per annum. by full year 2026,” Ryanair said.

The pay agreements with unions helped Ryanair retain staff and accelerate activity as Covid receded more rapidly than rivals.

The group’s balance sheet has also come through in robust health, with €4.5bn in cash on its balance sheet and net debt of just €0.5bn from €1.45bn.