Europe’s largest budget airline Ryanair has reported its first profit since the pandemic as demand bounces back.

Europe’s largest budget airline Ryanair has reported its first profit since the pandemic as demand bounces back.

Ryanair has seen a great recovery after the pandemic. Revenue has increased 124% YoY to €10.78bn with a net profit of €1.43bn. Looking at the balance sheet, cash on hand was strong at €3.559bn, with total assets at up €1.25bn to €16.4bn. Liabilities did increase though from €9.6bn to €10.76bn, this leaves Ryanair with a net positive asset of €5.64bn, €98m more than in 2021.  Customer numbers are also up 74% to 168.6m YoY which means the airline is now operating at 116% their 2019. Full results can be found here.

The Irish airline is investing heavily in Boeing and their new fuel-efficient 737s. The newest generation of aircraft can seat 4% more passengers while burning 16% less fuel. Currently, the airline has 98 of these aircraft with over 300 on order and expected delivery by 2037. They’re also making improvements to older aircraft by adding scimitar winglets which helps reduce fuel consumption by another 1.5%.

While oil prices are falling globally jet fuel is often bought at a fixed price for later delivery. Therefore, airlines may likely be paying for higher fuel prices despite the drop in oil prices over the last few months. This is good news though as sustained lower prices mean airlines will eventually catch up and will pay lower prices for fuel in the coming months – this is known as fuel hedging and is very common in the aviation industry.

Overall Ryanair is very well positioned to continue its dominance on the European market, however, rumors that easyJet is to be bought could make it increasingly harder for Ryanair as IAG step up their domestic low-cost rosters.

Our Ryanair analysis can be found here