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Ryanair said airfares over the peak summer season would be lower than Europe’s largest low-cost carrier had expected, a rare note of caution from an industry that has boomed over the past year.
Chief executive Michael O’Leary said on Monday that overall demand for flying was “positive”, but cautioned that “recent pricing is softer than we expected”.
He had previously forecast that fares would rise by as much as 10 per cent this summer, but now expected them to be flat or “modestly ahead” of last summer.
“It is a little bit surprising that pricing hasn’t been stronger, and we are not quite sure whether that is just consumer sentiment, or recessionary feel around Europe,” he said.
“We still see peak travel demand, certainly through July and August, being strong and if we have to discount . . . in April, May and June then so be it,” he said.
Airlines have reported booming demand for travel over the past year and have been able to raise prices and book bumper profits in response. Average airfares across Europe were between 20 and 30 per cent higher over summer 2023 compared with 2019, according to EU data.
Analysts and industry executives still expect a strong and profitable summer for Europe’s airlines, but O’Leary’s comments signal that consumers’ willingness to stomach higher fares has its limits.
EasyJet last week said it was still too early to make a prediction for fares this summer, but analysts said its commentary around passenger yields had softened from earlier in the year.
Ryanair reported a 34 per cent jump in profit after tax to a record €1.9bn for the 12 months to the end March. The profits came despite higher costs, including a 32 per cent rise in its fuel bill to €5.14bn.
The Dublin-listed airline did not provide guidance for its current financial year, but expected to grow passenger numbers by 8 per cent to between 198mn to 200mn, a slightly slower rate of growth than in the previous year.
Ryanair’s ambitious expansion plans have been hit by delivery delays. The airline said that it now expected to be short of 23 Boeing 737 Max aircraft by the end of July and warned “there remains a risk that Boeing deliveries could slip further”.
“The final outcome for the . . . financial year will be heavily dependent upon avoiding adverse events during the 2025 financial year, such as wars in Ukraine and the Middle East, extensive air traffic control disruptions or further Boeing delivery delays,” O’Leary said.
O’Leary welcomed recent management changes at Boeing, and said he hoped the US manufacturer would catch up on its delivery delays by October.
“Already we are seeing improved quality on our aircraft deliveries, but sadly not yet enough progress in terms of accelerating those deliveries,” he said.
Ryanair also announced a €700mn share buyback, citing a need to use its “surplus cash”. Former Conservative cabinet member Amber Rudd would join the airline’s board in July, it said.
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