Airline shares take off after Ryanair raises profit guidance

05/01/2023

Airline shares take off after Ryanair raises profit guidance

The Irish carrier flew 11.5 million passengers in December

Shares in some of the UK’s biggest airlines rose on Thursday after Ryanair increased its profit forecast for the year.

The Irish carrier celebrated a strong Christmas, the first with no hit from Covid-19 in three years, with the number of passengers rising by more than a fifth to 11.5 million in December.

The company operated 65,500 flights last month, taking the number of passengers carried throughout the year to 160 million.

The strong season meant that Ryanair now expects profit after tax to reach between a little over 1.3 billion euros (£1.1 billion) and 1.4 billion euros (£1.2 billion) during the financial year.

The forecast – released on Wednesday – is an increase from the 1 billion euros (£880 million) to 1.2 billion euros (£1.06 billion) range that the company had previously supplied to shareholders.

As markets opened in London the following morning, shares in some of the biggest airlines saw their shares jump.

IAG, the Anglo-Spanish company which owns British Airways, saw its share price rise by around 3%.

And Hungarian company Wizz Air got a 6.3% boost on the Stock Exchange late on Thursday morning.

Victoria Scholar, head of investment at interactive investor, said: “After a challenging few years during the pandemic when most flights were ground to a halt, Ryanair is storming ahead, outpacing its pre-Covid traffic figures and is on track to achieve better-than-expected full-year earnings.

“However, investors have had a difficult year with the stock, which is down by more than 30% over a one-year period, suggesting there is still a long way to go to restore investor confidence.

“The latest profit upgrade and traffic figures highlight the post-pandemic rebound in demand and the particular boost over the festive season.”

Published: by Radio NewsHub



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