Ryanair Holdings has posted a full-year loss of €355 million (pre-exceptionals), compared to a prior-year loss of €1,015 million.
FY22 scheduled revenues increased 156% to €2.65 billion. While traffic recovered strongly from 27.5 million to 97.1 million guests, the delayed relaxation of EU Covid-19 travel-restrictions until July 2021 (Oct. in the case of the UK Govt.), combined with the damaging impact of the Omicron variant and Russia’s invasion of Ukraine in H2, meant that fares required significant price stimulation. Average fares in FY22 were down 27% to just €27. Ancillary revenue delivered a solid performance, generating more than €22 per passenger as traffic recovered and guests increasingly chose priority boarding and reserved seating. Total revenues increased by over 190% to €4.80 billion.
While sectors increased almost 200% and traffic rose 253%, operating costs rose just 113% to €5.27 billion (incl. a notable 237% increase in fuel to €1.83 billion), driven primarily by lower variable costs such as airport and handling, route charges and lower fuel burn as 61 Boeing B737 Gamechangers entered the fleet (offset by the higher cost jet fuel). Lower costs, coupled with rising load factors, saw FY22 (ex-fuel) unit cost per passenger reduce to €35.
The company’s FY23 fuel needs are approx. 80% hedged (65% jet swaps at c. US$63bbl and 15% caps at c. US$78bbl). Almost 10% of Ryanair’s H1 FY24 fuel requirements are hedged at c. US$76bbl (via jet swaps). Carbon credits are 85% hedged for FY23 at €53 (well below the current spot price of almost €90). This very strong fuel hedge position gives Ryanair a considerable competitive advantage for the next 12 months and will enable it to grow market share strongly over the coming year.
Ryanair plans to grow FY23 traffic to 165 million (up from 97 million in FY22 and 149 million pre-Covid) and will pursue its load active, yield passive strategy to achieve this growth. While 80% of Ryanair’s fuel requirements are hedged well below current spot prices of over US$100bbl, our unhedged 20% will give rise to some unbudgeted cost increases.
