Ryanair CEO pleased with bookings, concerned about oil price

By Julia Payne

BRUSSELS (Reuters) -Ryanair Group CEO Michael O’Leary is “very pleased” with the strength of bookings for September and into October and thinks a rebound in travel from Asia will help keep European ticket prices high next summer, he told Reuters in an interview.

O’Leary, who spoke during a visit to Brussels, said he was concerned about the price of oil but that it was impossible to say if it would impact the profit outlook for the year at Ryanair, Europe’s largest airline by passenger numbers.

“We’re very pleased with the strength of bookings into September and October,” O’Leary said. “We’re on track to get to about 183 (million)-184 million passengers … so we’re continuing to run about 20-23% ahead of our pre-COVID numbers.”

“We did a 96% load factor (in August), carried 18.9 million passengers. We would have hit 19 million if it wasn’t for the UK ATC failure,” O’Leary said, referring to an air traffic control meltdown in late August.

A load factor of 96% means an average of 4% seats were not filled during the month.

Trans-Atlantic air travel boomed this summer due to post-pandemic wanderlust but Asian traffic to Europe only recovered to about 30% of its pre-COVID levels in part due to the closure of Russian airspace to non-Chinese airlines.

O’Leary expects Asian travel to Europe to recover to about 60% of its pre-COVID volumes next summer.

The Irish carrier saw a “very strong rebound” in non-leisure travel to lower-wage parts of central, east and south Europe, as well as Morocco which O’Leary attributed to small European manufacturers replacing suppliers from Asia as part of a “nearshoring” boom.

To cope with oil price risk, O’Leary said Ryanair had hedged 85% of its fuel needs until the end of its fiscal year (FY) in March 2024.

“And we’re now about 40% hedged for the first half of FY 25. So the April to September period of 2024 is now about 40% hedged at about $74 a barrel. We continue to be hedged well below current spot prices,” he said.

“We’ll continue to be concerned. … Air travel in Asia is recovering strongly. That should also help traffic across Europe in the summer of 2024. But it’ll mean that demand for jet oil will probably rise,” he said.

In central and eastern Europe, Ryanair is making more inroads into rival Wizz Air’s core markets. The group is adding a new country, Albania, this winter and expanding in Romania, Hungary and Poland.

“We’re charging ahead into eastern Europe. … We’re putting I think about 20 routes into Tirana, which is at the moment a Wizz market but they’re charging higher fares,” O’Leary said.

“The trend in kind of a macro level seems to be we’re expanding into their markets and they’re retreating further east, and into the Middle East,” he said.

(Writing by Conor Humphries; Editing by William James, Helen Popper and Mark Porter)