Ryanair has reported that in the first half of FY2024 scheduled revenues increased 37% to €6.1 billion, traffic grew 11% to 105.4 million, while average fares rose 24% to €58 due to a strong Easter and record summer 2023 demand. Ancillary revenue increased 14% to €2.5 billion (€23.70 per passenger). In the total first-half of FY24 revenue therefore rose 30% to €8.6 billion. Total operating costs increased 24% to €6.2 billion, primarily due to much higher fuel costs (+29% to €2.8 billion), higher staff costs (reflecting pay restoration, pre-agreed pay increases and higher crewing ratios as the carrier invested in ops. resilience) and higher ATC fees (incl. airport and handling charges).
Ryanair reported that its FY24 fuel requirements are almost 85% hedged at approx. US$89bbl (a mix of forwards and caps) while its FY25 hedging has increased to just over 50% at approx. US$79bbl. This will deliver savings of approx. €300m on the fuel already hedged for FY25. Over 90% of FY24 €/$ opex is hedged at 1.08 and almost 50% of FY25 is hedged at 1.12. This strong hedge position leaves the carrier very well protected from recent short-term fuel price volatility.
Ryanair targets approximately 183.5 million (+9%) FY24 traffic, although the final figure depends on Boeing meeting its delivery commitments between now and year-end. As previously guided, it expects ex-fuel unit costs to increase by €2 this year. Forward bookings (both traffic and fares) are robust over the late October mid-terms and into the peak Christmas travel period. With the benefit of constrained EU capacity this winter (Eurocontrol expect EU capacity to recover to only 94% of pre-COVID) and the impact of P&W engine repairs on competitor fleets, Ryanair currently expects Q3 average fares to be ahead of the prior year Q3 by a mid-teens percentage. Unhedged fuel costs, however, are significantly higher making it unlikely that the company replicate last year's bumper Q3 performance.
Despite uncertainty over Boeing deliveries, a significantly higher full-year fuel bill (up c.€1.3 billion on last year), very limited Q4 visibility and the risk of weaker consumer spending over coming months, Ryanair now expects that FY24 PAT will finish in a range of between €1.85 billion to €2.05 billion, assuming modest losses over the H2 winter period. This guidance remains highly dependent on the absence of any unforeseen adverse events (for example such as Ukraine or Gaza) between now and the end of March 2024. (£1.00 = €1.15 at time of publication).
