Ryanair experiences turbulence as profits plummet 

Is Ryanair facing a difficult future? The airline has recently disclosed a significant drop in profits, attributing this downturn to soaring fuel prices and changes in its online presence.

On Monday, January 29, Ryanair reported a dramatic decrease in after-tax profits for the quarter ending December, plummeting to €15 million from the previous year’s €211 million.

This decline comes amid a 35 per cent increase in the group’s fuel expenses, now totalling €1.2 billion. These costs have eclipsed the 17 per cent growth in revenue, painting a concerning financial picture for the airline.

Fuel costs and online presence impact

The fuel bill’s surge is not the only challenge Ryanair faces. The airline’s visibility on the web took a hit when several online travel agents, including prominent names like Booking.com, Kiwi, and Kayak, removed Ryanair from their platforms.

In response, the airline reduced its prices, a move necessary to maintain seat occupancy but one that impacts ticket revenues.

Michael O’Leary, Ryanair’s chief, shared his insights: ‘While we will benefit from the first half of Easter traffic falling in late March, this is unlikely to fully offset the weaker-than-previously-expected load factors and yields late in the third quarter and early fourth quarter.’

He emphasised that the final yearly results hinge on avoiding unexpected negative events, referencing global concerns like the Ukraine conflict and the Gaza situation.

Challenges ahead

Ryanair’s strategies to counter these setbacks include a new partnership with Loveholidays, marking its first collaboration with an online travel agent. This move comes after the airline’s repeated objections to other online travel agents selling its flights, often without authorisation.

Ryanair has accused firms like Kiwi.com, Opodo, eDreams, and Lastminute.com of overcharging customers. Moreover, the issue of not receiving passengers’ contact details complicates communication for travel updates and refund processing.

The airline now anticipates an after-tax profit of between €1.85 billion and €1.95 billion for 2023, a reduction from its previously estimated range of €1.85 billion to €2.05 billion.

This adjustment reflects the company’s efforts to adapt to the changing dynamics of the aviation industry and the global environment.