Ryanair is forced to reduce its passenger target and is cautious for the summer

(BFM Bourse) – The low-cost airline expects to carry 183.5 million people for its fiscal year ending next March due to delays in Boeing aircraft deliveries. Forecasts for the summer period also point to a falling price environment. Action suffers on the Dublin Stock Exchange.

Ryanair fails to highlight its good start to the year on the stock market. Like all airlines, the group has benefited from the strength of travel demand, which has enabled it to realize an increase of almost 30% since 1 January.

But the publication of the results for the first quarter of the financial year 2023-2024, which ends next March, has been sanctioned by investors. On the Dublin Stock Exchange, the low-cost Irish company’s stock fell 4% to 15.83 euros around 12:00 p.m.

With the benefit of a very favorable basis for comparison, the company with the indescribable Michael O’Leary at the helm has of course published results that have risen sharply and even exceeded expectations. Revenue in the period from April to the end of June rose 40% to 3.65 billion euros, thanks to a good Easter period. The turnover for the first quarter of 2022-2023 had been penalized with reservations of half a bar due to the consequences of the war in Ukraine.

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“Cautious” outlook

The net income group’s share amounted to 663 million euros, that is, almost four times more than in the same period in the financial year 2022-2023. And more than the roughly 620 million euros expected by analysts, according to a consensus cited by the Stifel bank.

But on the outlook side, Ryanair has been forced to lower its forecast for passengers carried for the full current financial year, now expecting 183.5 million people, down from 185 million previously. The low-cost airline cited delays in plane deliveries from Boeing this spring and next fall to justify this revision.

Beyond that, Stifel emphasizes that the outlook provided by the company is “fairly cautious.” Ryanair says bookings for the second quarter, the period from July to September, are “robust”. But the company also notes “a decline” in the pricing environment since “late June-early July.”

Some caution, which can therefore encourage investors to take their profits on the title.

Fear due to fires in Greece?

Danni Hewson, head of financial analysis at AJ Bell, for his part, links the drop in action to that of other airlines with the fires ravaging Greece, the summer’s flagship tourist destination.

“Speaking of holidaymakers forced to leave hotels and sleep in gyms or on the streets may make others think twice about booking last-minute holidays for fear of being caught up in the chaos too,” she said.

In addition to Ryanair, easyJet fell 2.9% on the London Stock Exchange and on the same stock market Wizz Air, a Hungarian low-cost airline, lost 4.8%.

The decline in these airlines’ shares “suggests that investors are concerned that they will not meet short-term earnings forecasts and that they will incur additional costs due to the return flights they will have to make to bring customers home,” continues Danni Hewson.

In Paris, Air France-KLM resists well (-0.56%) obviously having a much larger and more diversified network than the low-cost carriers.

Julien Marion – ©2023 BFM Bourse

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