Ryanair Holdings Plc, Europe’s biggest discount airline, raised its full-year profit target following a stronger-than-expected Christmas travel period, spurring gains across European airline stocks.
(Bloomberg) — Ryanair Holdings Plc, Europe’s biggest discount airline, raised its full-year profit target following a stronger-than-expected Christmas travel period, spurring gains across European airline stocks.
Earnings for the 12 months through March this year could reach €1.425 billion, versus a previous target of as much as €1.2 billion, Ryanair said after markets closed Wednesday. Profit in the December quarter was close to €200 million, it said.
Shares of the Irish carrier gained as much as 7% in Dublin, their biggest intraday gain since April. Discount rivals EasyJet Plc and Wizz Air Holdings Plc advanced 7.1% and 10% respectively, while full-service operators Air France-KLM and IAG SA, parent of British Airways, added almost 4%.
Ryanair said holiday season bookings and fares benefited from pent up demand, with people able to travel freely during the period for the first time in three years. The company maintained its full-year traffic guidance of 168 million passengers, indicating the earnings increase has been spurred mostly by people paying more.
“On the strength of this evidence, demand for short-haul leisure travel in Europe remains healthy, and we are increasingly optimistic going into the next reporting season,” Bernstein analyst Alex Irving said in a note.
Ryanair cautioned the guidance “remains heavily dependent upon avoiding adverse events” in the year’s final quarter, such as a worsening of the Covid-19 pandemic or a deterioration of the war in Ukraine. It expects a loss for the three months regardless, since the lucrative Easter travel season falls in April.
UK Softer
The discount specialist said it has seen a “recent softening” of traffic and pricing on UK outbound services and Irish flights to provincial British cities, which will weigh on the quarter.
Data from aviation analytics firm Cirium released Wednesday shows the number of flights from the UK during the festive period remained 22% down on pre-coronavirus levels, though 6% more flights departed on Christmas Day itself than in 2019.
Ryanair shares traded 7% higher at 13.75 euros as of 2:32 p.m. The stock lost 20% of its value in 2022, the worst annual performance since 2018.
(Updates with gains in other European airline stocks from first paragraph, Cirium data in eighth)
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