European Airline Ryanair's Q3 Profit Slumps As Higher Fuel Costs Offset Revenue Gains; Reportedly Eyes New Boeing Jet Purchase Strategy

Ryanair Holdings PLC RYAAY reported third-quarter fiscal 2024 revenue growth of 17% Y/Y to €2.70 billion.

Net profit was €15 million, a significant fall from €211 million a year ago, as higher fuel costs offset revenue gains. The load factor for the quarter was 92%, lower than 93% a year ago.

Scheduled revenues were up 21% Y/Y to €1.75 billion, led by traffic growth of 7% Y/Y to 41.4 million customers and a 13% Y/Y rise in average fares to €42. Also, Ancillary revenue rose 10% Y/Y to €0.95 billion.

Operating costs increased 26% Y/Y to €2.7 billion on a 35% increase in fuel costs, higher staff costs, and the earlier timing of maintenance.

Net cash generated by operating activities for the nine months totaled €1.285 billion, compared to €1.72 billion in 2023 same quarter. As of December 31, 2023, net cash stood at €2.52 billion.

The company announced an interim dividend of €0.175 per share to be paid on February 28, 2024 (Record Date: January 19, 2024).

The company's Q4 fuel is almost 94% hedged (a mix of forwards and caps), and FY25 hedging has increased to 65%.

Fiscal 2024 Outlook: Ryanair continues to expect traffic to be around 183.5 million (+9% Y/Y) despite slightly lower Q3 load factors and Boeing Company BA delivery delays.

Related: Airline CEOs Express Frustration With Boeing’s Failures: ‘This Isn’t New’

RYAAY now expects FY24 ex-fuel unit costs to rise by c.€2.50. RYAAY states that Q4, which is traditionally the weakest quarter, will also be impacted by the partial unwind of free ETS carbon credits (from 1 Jan.).  

The company narrowed its PAT guidance to a range of €1.85 billion to € 1.95 billion (previously €1.85 billion to € 2.05 billion ). 

Additionally, Reuters reported that Ryanair has informed Boeing of its willingness to purchase any 737 MAX 10 aircraft rejected by U.S. customers, provided the price is right. 

RYAAY currently holds firm orders for 150 MAX 10 jets, the largest model in the 737 series, and options for an additional 150, with initial deliveries expected in 2027.

Related: Ryanair Passengers Reportedly Unshaken By Boeing Safety Drama, CEO O’Leary Says “We See No Indication Of Any Passenger Concern”

The report added Ryanair anticipates that the jet will receive certification by year-end and commence flights early next year despite the Federal Aviation Administration’s now-lifted grounding of MAX 9 jets.

Price Action: RYAAY shares are trading up by 0.34% at $130.55 premarket on the last check Monday.

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