Image source: Tom Buysse - Shutterstock
What's going on?
Ryanair reported better-than-expected quarterly results on Monday.
What does this mean?
Ryanair makes the bulk of its profit by flying sun-seeking Europeans everywhere from Mykonos to Rome over the summer period. Good thing, then, that a couple of factors helped Ryanair overcome staff shortage-induced delays and cancellations better than its flight-slashing rivals last quarter. For one, Europe’s biggest discount airline kept more of its crew on the payroll and more of its planes in the hangars to wait for the rebound it’s seeing now. And for another, it generally flies out of smaller, less congested airports that have been less affected than other major hubs. So in the end, Ryanair flew 46 million passengers last quarter, nearly six times as many as the same time last year. That helped it make a profit – the first time in the quarter for three years – of $174 million, a huge leap from the near $300 million loss it took in the same period last year. Looks like investors have a new favorite airline: they sent its stock up 6%.
Why should I care?
The bigger picture: Even best laid plans…
Ryanair wants to use that momentum to win over more market share, so it plans to up the number of flights on offer this summer. But the outlook is clouded: it’s hard for the airline to predict long-term demand since cautious travelers are still making bookings last minute, and then there’s the ever-looming prospect of more Covid outbreaks during fall.
Zooming out: You can’t get the staff these days.
Airlines aren’t just struggling to replace staff they laid off during the pandemic: industry-wide strikes are also making it hard to keep operations going, with Lufthansa being the latest to face action this week. Ryanair’s trying to avoid that hassle: it’s already agreed with unions to reverse pay cuts for the majority of its pilots and crews, and thinks the rest should be settled soon.
Originally posted as part of the Finimize daily email.
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