Ryanair came very close to setting a full-year profit record in the year ending March 31. Despite fewer “fortunate” hedges on fuel costs, Ryanair is cautiously hopeful that strong summer demand would assure modest profit increase in the upcoming 12 months.

The biggest airline in Europe in terms of passengers expects a 10% increase in traffic this year to more than offset an increase in its oil costs of 1 billion euros ($1.1 billion), it announced on Monday as it reported slightly higher-than-anticipated annual post-tax earnings of 1.43 billion euros.

Summer European short-haul capacity is expected to be 5–10% below pre-pandemic levels, according to Ryanair, and peak summer fares are “trending ahead of last year,” which will benefit the airline more.

“There is no doubt in my mind that people who have been locked up for the two years of COVID are going back traveling. They see travel not as a luxury but as an essential and families are returning to the beaches of Europe this summer,” Chief Executive Michael O’Leary said in a presentation to investors.

The previous low-cost competitor EasyJet (EZJ.L) and other big European airlines have all cited strong summer bookings as evidence that consumers are prioritising travel despite seeing their incomes squeezed by increasing inflation.

O’Leary issued a warning, saying he was unsure if that would continue and that the winter and the beginning of 2024 would be more difficult.

However, he went on to say that a sizable backlog of aircraft deliveries is probably going to limit European capacity growth for at least four more years and give Ryanair “enormous growth opportunities” when it adds 110 new Boeing jets over the course of the following three summers.

Boeing supply delays could shift part of its anticipated growth onto the less profitable second half of this year, he added, necessitating the sensible reduction of capacity. The carrier anticipates being short up to 10 new aircraft in June and July.

The Irish airline was confident it will boost passenger numbers to 185 million from a record 168.6 million in the previous financial year, according to finance chief Neil Sorahan, who spoke to Reuters.

According to him, the delivery delays could result in a 750,000 passenger drop in the first half.

O’Leary anticipates deliveries to be “smoother” next summer and that all the aircraft required for summer 2024 will be delivered by the end of next May.

By March 2034, Ryanair projects that a multibillion-dollar agreement with Boeing for up to 300 jets will enable traffic to increase to 300 million people annually.

Ryanair’s full-year post-tax earnings of 1.43 billion euros ($1.57 billion) exceeded both its own target of 1.425 billion euros and analyst expectations.

The business suffered a 355 million euro loss in the pandemic-affected fiscal year of 2017, but it nearly surpassed the record 1.45 billion euro profit recorded in the year ending March 31, 2018.

(Adapted from USNews.com)