Ryanair passengers have been warned to “book early to avoid rising close-in prices” but the threat shouldn’t be of too much concern to holidaymakers.
The budget airline reported a strong full year, as expected, with traffic recovering post-pandemic, fares improving and “advantageous fuel hedges.”
Although 85% of its fuel was hedged at US$89bbl, it was still the driving force behind a 75% increase in total operating costs to €9.2bn.
Fuel rose by 113% to €3.9bn, and the airline expects to add another €1bn in fuel costs in the current financial year.
“The outlook for full-year 2024 has fuel costs increasing by more than €1bn, higher than the €600mln we assume, and a rise in ex-fuel unit costs compared to our flat trajectory,” said Peel Hunt.
While it emphasised it expected a strong summer, rising fuel costs, as well as possible delivery delays from Boeing, could dampen the mood, at least for customers.
To offset rising costs, it warned it would be raising prices, and urged customers to book as early as possible.
Price rises shouldn’t be of too much concern to holidaymakers looking to get away over the next year, however, and “demand remains robust” even with fares tracking higher, said Liberum.
John Strickland, director of JLS Consulting, said Ryanair’s low fare base of under £40 means even a double-digit increase in price would leave them competitive against the likes of EasyJet and Wizzair.
Importantly, it will be “affordable for their target audience,” Strickland added.