Ryanair says too early to measure Greek wildfires impact as profits surge

It is too early to say what, if any, impact wildfires on the Greek island of Rhodes will have on Ryanair’s summer season but the airline’s priority is to “help people out in the short-term”, the carrier’s chief financial officer (CFO) said, as the company reported blowout second quarter earnings.

Ryanair said in a statement on Sunday that its flights to and from Rhodes Airport are operating “as normal and unaffected by the forest fires”. The airline also said that it will accept temporary travel documentation issued by the Greek Police in lieu of official documentation.

Speaking to The Irish Times on Monday morning after the publication of Ryanair’s financial results for the three-month period to the end of June, Ryanair CFO Neil Sorahan said that Rhodes is “a very small part of our market”, accounting for just six flights out of 22,000 the airline will operate this week.

Mr Sorahan said: “There’s been fires all across Europe as long as I can remember and they tend to be quite isolated. What we’re seeing in Greece may be a little bit more sensational than we’ve seen before. But it’s too early to say. I don’t think it will have much of an impact on the summer. The key criteria is just to help people out in the short term.”

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Net profits at Ryanair soared by almost 300 per cent to €663 million in the three months to the end of June, the first quarter of its fiscal year, compared with the same period last year, driven by “strong” Easter bookings and the UK’s extra bank holiday in May for the coronation of King Charles III, the airline said.

The performance in the three months between April and June was underpinned by an 11 per cent increase in passenger numbers to 50.4 million compared to 45.5 million in the first quarter of last year, which was “badly damaged” by the Russian invasion of Ukraine at the end of February 2022.

[ Airline chief executive says he will invest close to €3bn in Ukrainian aviation industry when war ends ]

Ryanair’s revenues increased 40 per cent year on year in the quarter to €3.65 billion while air fares climbed 42 per cent to €49 on foot of a strong Easter holiday, the airline said.

However, the airline lowered its full-year traffic to grow to around 183.5 million passengers, down from a previous forecast of 185 million, citing delivery delays at Boeing, the sole supplier of its aircraft. Shares in the carrier dropped 6 per cent in Dublin.

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But the airline said: “Despite uncertainty over second-half Boeing deliveries [ ... ], a significantly higher fuel bill (up €1 billion over last year), volatile oil prices for our unhedged fuel, very limited second-half visibility and the risk of tighter consumer spending this winter, we remain cautiously optimistic that FY24 PAT will be modestly ahead of last year.” However, it said it is still too early to provide meaningful full-year profit guidance.

Ryanair said it had originally expected 51 aircraft deliveries on or before April 30th, but the last of these deliveries was delayed into July due to supply chain issues at the aircraft maker.

[ Ryanair passenger traffic hits new record in June ]

Mr Sorahan said that Boeing had been “hugely unlucky” in recent times. “In the last couple of months, there was a strike in their fuselage manufacturer and then when that strike was resolved – they take the fuselages by train from Wichita to Seattle – the only bridge in Montana over which the trains go collapsed. So there’s been a knock-on impact on deliveries into the autumn.”

Operating costs, meanwhile, were up by almost quarter in the first fiscal quarter, climbing to €2.9 billion. Staffing costs increased 23 per cent year on year to €360 million after the airline went on a recruitment drive last year in anticipation of a busy summer season and the French air traffic control strikes that would ultimately force the airline to cancel 1,700 flights in early June.

After recruiting more staff, Ryanair is “operating with about 5.8 sets of crews for every aircraft that we have,” Mr Sorahan said. “Traditionally, we would have operated with about 5.1 and last year, we had 5.4 sets of crews for the aircraft. So we built a lot of resilience in there on days of strikes.”