Budget airline Ryanair reported that its fare drops have slowed down following a summer of declining ticket prices.
Europe’s largest low-cost airline announced on Monday (4 November) that its after-tax profit for the six months to the end of September ended at €1.79bn (£1.5bn), 18 per cent lower than the same period last year, which saw a profit of €2.18bn (£1.8bn).
While there was a strong growth in passenger traffic of 115m customers, a rise of nine per cent, this was offset by lower air fare.
The Irish airline said its average fare fell by 10 per cent overall, down by 15 per cent in the first quarter and down by seven per cent in the second quarter.
Earlier this year the chief executive, Michael O’Leary, predicted average summer fares would rise by five to 10 per cent, however, the reality delivered very different results as Ryanair saw a price slump over the peak summer months.
“Good news for our passengers, bad news for our shareholders,” O’Leary said in August after his revised price drop prediction.
However, after a summer of airfare decline, Ryanair now reports that the lower prices seem to be moderating.
Mr O’Leary, said: “Forward bookings suggest that the third-quarter demand is strong and the decline in pricing appears to be moderating.”
“We remain cautious on the third-quarter average fare outlook, expecting them to be modestly lower than the third quarter prior year (subject to close-in Christmas and New Year bookings).”
Ryanair’s chief financial officer, Neil Sorahan, told Reuters that fare declines in the quarter ending in December would likely be below five per cent.
The airline also aired its grievances over the delays with their Boeing orders, as the aircraft manufacturer workers’ strike have hindered deliveries.
Ryanair has said it was “sensible to moderate” their traffic growth target for FY26 to 210m passengers rather than their previous 215m to reflect the delivery delays.
However, they continue to target between 198m and 200m passengers in 2025 (+8 per cent), subject to no worsening of current Boeing delivery delays.
Mr O’Leary said on Monday: “While modest delay compensation was received in H1 (mainly maintenance credits) this does not offset the substantial impact of a 5m+ passenger shortfall in FY25 due to these delivery delays.”
Ryanair’s profit fall announcement comes days after they also said they planned to cut capacity to and from UK airports by up to 10 per cent next year following Labour’s annual Budget last week.
Mr O’Leary criticised the Budget on Friday due to its plans to raise air passenger duty by £2 per passenger, which they say will “burden” UK families going on holiday.
“This Labour government promised to deliver growth but instead their first budget has damaged growth, damaged tourism, and damaged air travel to/from the UK.
“This short-sighted tax grab will make air travel much more expensive for ordinary UK families going on holidays abroad.”
Ryanair said it will now “review” its UK schedules and expects to cut capacity, which could result in reducing air travel to and from the UK by up to 5m passengers.
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