Ryanair Holdings PLC (LSE:RYA) has admitted it cannot provide meaningful profit guidance for the full year against the backdrop of economic turmoil, the conflict in Ukraine and the possibility new Covid strains could unsettle the international travel market.
“We have limited visibility into the second half of Q2 and almost zero visibility into H2, when we are typically loss-making,” the budget airline's investors were told.
Chief executive Michael O’Leary said he hoped to provide a forecast alongside November’s interim results statement.
The words of caution followed what on the face of it was a robust first-quarter showing with the group posting a €170mln profit after tax compared with a loss of €273mln at the same point last year.
Customer numbers grew by 461% to 45.5mln, while the load factor (reflecting how full Ryanair’s planes were over the three months ended June 30) was 92% - a 19-point improvement over 12 months.
Looking ahead, the Irish carrier made mention of soaring fuel prices. And, while the group is hedged in this regard (meaning it has insurance against rising fuel costs), its bills will rise by around 20% over the remainder of the financial year.
The company, while unwilling to commit to an earnings forecast, reckons it will carry 165mln passengers during the current 12 months, up 11% on pre-Covid levels.
CEO O’Leary said: “While we remain hopeful that the high rate of vaccinations in Europe will allow the airline and tourism industry to fully recover and finally put Covid behind us, we cannot ignore the risk of new Covid variants in Autumn 2022.
“Our experience with Omicron last November, and the Ukraine invasion in February, shows how fragile the air travel market remains, and the strength of any recovery will be hugely dependent upon there being no adverse or unexpected developments over the remainder of [the year].”