Ryanair has announced it expects to report a "stronger-than-expected" third quarter and has raised its FY2023 profit guidance. The Irish low-cost carrier has benefited from high travel demand over the Winter holidays. Let's take a closer look below.

Ryanair ups profit forecast

The airline has raised its profit guidance for FY2023 from an initial range of €1.00bn ($1.06bn) - €1.20bn ($1.27bn) up to €1.325bn ($1.405bn) - €1.425bn ($1.511bn), an 18.7% increase reflecting its strong performance over the last quarter.

The carrier cited "strong pent-up travel demand over the holiday season for the first time in 3 years" and the absence of fresh disruption from COVID and the Ukraine conflict as the driving forces behind better-than-expected Christmas and New Year demand and fares.

As for its Q3 performance, Ryanair projects an after-tax profit of almost €200 million. The LCC handled 11.5 million passengers in December, a 21% increase from 2021, while its load factor of 92% was 11% higher than last year. It managed 11.2 million passengers in November, up by 10%, while the 15.7 million passengers served in October was a sizable 38% improvement from 2021.

Ryanair 737
Photo: InsectWorld/Shutterstock

The recent winter holiday period was the first in three years when travelers could fly throughout Europe free from any restrictions. As Simple Flying reported, UK festive flights reached 86% of pre-COVID levels, although considerable industrial action hindered a full return to pre-pandemic levels. Not all sectors have been optimal, with Ryanair noting a recent drop in demand in regional UK and Irish traffic and pricing.

Annual traffic forecast unchanged

The carrier still expects to serve around 168 million passengers over FY2023, with its stronger Q3 performance primarily down to higher yields rather than passenger numbers. Ryanair's quarterly results for Q3 will be released on January 30th.

However, the airline has projected the current fourth quarter will be a loss-making one, primarily as Easter 2023 will happen in April and not March. This won't be too much of a problem for the LCC given its excellent half-year results - the airline posted record half-year profits of €1.37 billion following a huge increase in capacity from 2021.

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Possible headwinds on the horizon

Ryanair has warned that its updated guidance is dependent on no further "adverse events," particularly regarding COVID and the ongoing Ukraine conflict. The emergence of a new variant could spell major problems for the airline as it may herald the return of restrictions seen in 2020 and 2021.

Ryanair Boeing 737-8 MAX 9H-VUN
Photo: Vincenzo Pace | Simple Flying

Readers may recall airlines gearing up for a return to normality in Winter 2021 before the Omicron variant forced authorities to reinstate certain restrictions - in fact, Ryanair estimated that it lost around €100 million due to Omicron. Countries worldwide are fearful of such a scenario reoccurring given the COVID situation in China and have implemented restrictions on China flights.

Do you see the aviation industry suffering further headwinds in the next three months? Let us know your insights in the comments.

  • Ryanair Boeing 737
    Ryanair
    IATA/ICAO Code:
    FR/RYR
    Airline Type:
    Low-Cost Carrier
    Hub(s):
    Dublin Airport, London Stansted Airport, Milan Bergamo Airport
    Year Founded:
    1985
    Airline Group:
    Ryanair Group
    CEO:
    Eddie Wilson
    Country:
    Ireland