Ryanair sees no growth in peak summer fares, but risk of fuel shortages recedes

Ryanair on Monday (May 18) warned that consumer anxiety surrounding the U.S.-Israeli war on Iran is likely to wipe out any growth in fares in the peak summer months, but the threat of fuel shortages is receding as suppliers adapt to the closure of the Strait of Hormuz.

The comments came as Europe's largest airline by passenger numbers reported a record profit for the fiscal year that ended in March, slightly ahead of analyst expectations.

Ryanair last week said it does not expect a disruption to jet fuel supplies in Europe this summer but that its profit may come under "a bit of pressure" if oil prices remain high for longer.

The low-cost carrier had been expecting low-single-digit percentage increases in fares during the peak summer months, but pricing "is now trending broadly flat" in the July-to-September period thanks to inflation fears and consumer concerns about fuel shortages, it said in a statement.

Visibility on fares is poor, however, and the summer's profitability will depend heavily on last-minute bookings, Ryanair said.

The airline is "increasingly confident" that there will be no disruption to jet fuel supplies even after the summer as suppliers increase their volumes and seek alternatives to Gulf oil supplies, Chief Financial Officer Neil Sorahan said in an interview.

The airline's suppliers this week said there would be no disruption between now and mid-July, Group Chief Executive Michael O'Leary said in a video presentation.

On Monday, Ryanair reported an after-tax profit of 2.26 billion euros ($2.63 billion) for the fiscal year, compared with a forecast of 2.20 billion euros in a company poll of analysts and up from 1.61 billion euros a year earlier.

That did not include an exceptional 85-million-euro provision related to a fine from the Italian competition authority in December that it said it expects will be overturned on appeal.

"We've delivered a record year, record traffic, record profits," O'Leary said. "Clearly at the moment we are going through significant uncertainty."

-Reuters