Ryanair Holdings Plc said it’s confident it can sustain its profitable run into next year and beyond as surging travel demand drives fares and as the company operates more high-capacity, fuel-efficient aircraft.

Profit after tax in the fiscal third quarter through December reached €211 million ($229 million), compared with a loss of €96 million a year earlier, Europe’s largest discount airline said in a statement Monday. The company reiterated its full-year profit outlook range of €1.325 billion to €1.425 billion, which Ryanair had raised earlier this month. 

“We will deliver record profits in the current financial year and we would expect to continue to grow profitably into next year and beyond,” Chief Financial Officer Neil Sorahan said in an interview. “Based on current booking profiles, we think that fares will rise into Easter and the summer.”

The airline industry is recovering from its worst-ever slump, and discount airlines like Ryanair and EasyJet Plc in particular are benefiting as budget-minded consumers hunt for deals. Ryanair said it’s winning market share in places like Spain and Scandinavia, and the airline is putting more capacity into markets including the UK, using its fleet of high-capacity Boeing Co. 737 Max that carry more people at reduced fuel burn.  

Profit was less than the estimate for €263.3 million by Bloomberg. The stock declined as much as 42 cents, or 2.7%, to €15.1, clipping this year’s gain to 24%.

Slow Delivery

Ryanair cautioned that some deliveries of the new Boeing model might slip as the US manufacturer continues to grapple with production, with the CFO predicting that Ryanair may fall “four or five aircraft short for peak summer at this point in time.”

Strong bookings have also driven up fares, Ryanair said, as people spend the savings they made during the pandemic. As the cost of living soars in Europe amid fears of recession, Ryanair is banking on passengers trading down from full-service rivals rather than avoiding travel altogether, Sorahan said in a separate interview on Bloomberg Television.

Passenger numbers should reach 168 million this fiscal year and rise to 225 million by 2026. Ryanair reiterated that it will have a loss in its fiscal fourth quarter because the busy Easter travel time falls outside the period. 

Chief Executive Officer Michael O’Leary said this month that the company was seeing its best ever sales for summer travel as travel remains a priority for the public and Ryanair expands its route network. The carrier said fares remained buoyant after rising last year and would likely show a further high single-digit percentage gain.

The CFO said the company is benefiting from an influx of foreign tourists as more US travelers take advantage of the strong dollar and flows from Asia improve. 

Ryanair will make use of its strong balance sheet to pay off €1.6 billion in maturing debt using its cash on hand, the CFO said.