Ryanair narrows profit guidance following clash with travel agents, says Boeing delays will hit growth

By Louis Goss

Ryanair on Monday lowered its full-year profit guidance, as it said higher fuel and staffing costs, and a decision by online travel agents to stop listing its flights, had hit profits in the final three months of 2023.

The Irish airline also told investors that delays of Boeing aircraft deliveries are set to impact its growth over the coming year.

The low-cost airline (IE:RYA) (RYAAY) said the decision by "pirate" travel agents - including Kiwi, and Booking Holdings (BKNG) owned websites Kayak and Booking.com - to stop listing Ryanair flights on their websites in early-December led to a 1% drop in its passenger numbers in the final quarter of 2023.

Online travel agents removed Ryanair flights from their listings late last year, after facing pressure from consumer protection watchdogs and Ryanair itself.

Ryanair had previously raised concerns about unauthorized websites marking up its ticket prices and providing incorrect passenger details, before introducing a new set of customer verification measures for all passengers booking their flights via third-party websites.

The airline said it has now struck deals with both Kiwi and Love Holidays, which will see the online agents sell flights directly through Ryanair's website, in a shift intended to prevent any markups on seat price or any other ancillary products.

The Irish air carrier added that 35% higher fuel prices and agreements with pilots' unions in Belgium, Italy and the U.K. had also raised its operating costs by 26%, to EUR2.7 billion, which offset a 21% uptick in revenues driven by a 13% rise in ticket prices.

Euronext Dublin listed shares of Ryanair fell around 1% on Monday.

Ryanair narrowed its profit guidance for the full year ending in March, from EUR1.85 billion - EUR2.05 billion to EUR1.85 billion - EUR1.95 billion, as it fell short of analysts' estimates in reporting post-tax profits worth EUR15 million for the final three months of 2023, down 93% year on year.

Company watchers had previously expected Ryanair would generate EUR73 million in post-tax profits in the final quarter of 2023, according to seven analysts polled by Factset.

The airline noted that its ability to achieve its new guidance will also be "heavily dependent" on the world avoiding any "unforeseen events," including a possible worsening of the Israel-Hamas conflict, further Boeing delivery delays, or an escalation of the Ukraine war.

Ryanair, which was first set up in 1984, noted that delays in Boeing's (BA) deliveries are now constraining its growth. The airline said it expects Boeing will have completed just 50 deliveries by June 2024, of a total 57 planes that were initially due to be delivered by April 2024.

The airline warned these delays mean its own passenger numbers will drop from 205 million this year to 200 million in 2025.

Ryanair, however, signaled that it remains confident in Boeing and continues to work closely with the plane manufacturer following a meeting with the company's senior management at its Seattle headquarters in January.

The airline on Monday also said it would be willing to buy any Boeing MAX-10's that have been rejected by the manufacturer's U.S. customers, following the Federal Aviation Administration's decision to ground Boeing's MAX-9s after a panel blew off an Alaska Airlines flight in January.

-Louis Goss

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01-29-24 0726ET

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