Ryanair, Europe’s largest airline by passenger numbers, announced on Monday that it expects airfares during the busy summer travel season to be “materially lower” than last year. The low-cost carrier reported a significant decline in profits, with average fares falling nearly 15% in the April-to-June quarter compared to the same period in 2023, dropping from €49.07 ($53.42) to €41.93 ($45.65).
The airline attributed this drop partly to the timing of the Easter break, which partly occurred in March this year. Despite strong demand in the second quarter, Ryanair’s CEO Michael O’Leary noted that pricing remains softer than expected, leading the airline to anticipate significantly lower fares during the crucial July-September period. Previously, Ryanair had expected fares to be “flat to modestly up.”
Neil Sorahan, Ryanair’s chief financial officer, mentioned in an investor call on Monday that consumers were pushing back on fares and spending more cautiously. This cautious spending contributed to a 46% decline in the airline’s first-quarter profits, which fell to €360 million ($392 million) despite a 10% increase in passenger numbers.
At 6:20 a.m. ET, Ryanair’s shares were down more than 15%, with other European airlines also experiencing declines. Shares in British carrier EasyJet fell by 8%, while IAG, the parent company of British Airways, saw a 4.4% drop.
This latest fare forecast contrasts sharply with Ryanair’s warning five months ago that it might need to raise fares by as much as 10% over the summer due to delays in aircraft deliveries from Boeing, which has been dealing with various safety and quality issues.
In January, a piece of fuselage blew out on a 737 Max 9 plane operated by Alaska Airlines, prompting further problems and disruptions in Boeing’s production schedule. Despite these challenges, Ryanair reported an increase in passenger numbers to 55.5 million in the first quarter, “despite multiple Boeing delivery delays.” The airline also noted improvements in the quality and frequency of deliveries from Boeing.
Looking ahead, Ryanair expects its passenger numbers for the entire financial year, ending in March 2025, to grow to around 200 million from 184 million, approaching the 190 million passengers that flew with Delta Air Lines last year.
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