Ryanair profits surge on earnings and Boeing talks

Ryanair shares soared by as much as 7% on the back of it posting strong earnings for its latest quarter.

Investor enthusiasm also came despite Ryanair warning that reaching its target of carrying 200m passengers per year could take up to two years longer than anticipated.

Ryanair reported a post-tax profit of €88m for the three months to the end of December; the third quarter of its financial year. The figure compared to a €66m net loss for the same period the previous year. Revenues, meanwhile, rose by 21% to just over €1.9bn and third quarter passenger numbers grew by 6% year-on-year to almost 36 million people.

Ryanair group chief executive Michael O’Leary said passenger bookings, to date, for the fourth quarter are up by around 1% year-on-year but the company remains cautious given a weak comparison period 12 months ago.

Last month, the airline guided for annual post-tax profits of between €950m and €1.05bn.

Based on current trading conditions, it expects the final profit for the 12 months to the end of March to be in and around the midway point of that range.

Mr O’Leary also said that it is now likely Ryanair won’t get first deliveries of its new fleet of Boeing 737-Max jets until September or October of this year, despite the airline recently saying it could receive deliveries by April.

Ryanair said it will take a maximum of eight new planes per monthly delivery and now expects to have around 55 of its new 737-Max jets to use for its summer 2021 schedule and follow that up with similar numbers in the following three years.

That means it will only receive its new planes a year later than planned.

Because of that, Mr O’Leary said Ryanair may have to push out its plans to fly 200m passengers per year by 12-24 months, meaning the airline might not reach that milestone until 2026.

Mr O’Leary said Ryanair’s talks with Boeing have been “going well”, and that the airline has submitted an offer to Boeing for a new order of the 737-Max jets.

He said the offer was for the Max-10, a larger model than the Max-200 model it currently has on order, but he said he did not expect Boeing management to agree the order until the Max is back in service.

Analysts said Ryanair should prosper from continuing airline consolidation, but will not be immune should the coronavirus spread to Europe.