HomeTravel NewsRyanair Predicts Continued Lower Fares Despite Profit Erosion

Ryanair Predicts Continued Lower Fares Despite Profit Erosion

Ryanair boss Michael O’Leary has said average air fares in the run-up to Christmas will likely remain lower than 12 months ago, despite softer flight prices damaging the airline’s profits of late.

Ryanair’s newly-published first half financial figures – covering the six months to the end of September – show an 18%, year-on-year, drop in after-tax profit to €1.79bn. Revenue was up 1% at €8.69bn; but the slowdown was hit by lower fares during the period.

Average air fares fell 10% in the first half of Ryanair’s current financial year (which runs to the end of March), and were down 7% in the second quarter, alone.

Ryanair CEO Michael O’Leary

However, the lower fares also drove passenger numbers, with Ryanair reporting a 9% year-on-year increase to 115.3 million passengers.

“We remain cautious on Q3’s [Ryanair’s financial third quarter from October to the end of December] average fare outlook, expecting them to be modestly lower than Q3 prior year,” Mr O’Leary said on the back of Ryanair’s latest financial results.

Ryanair-early-morning

“The move of half Easter into PYQ4 and out of Q1, consumer spending pressure – driven by higher-for-longer interest rates and inflation reduction measures – and a drop in OTA [online travel agent] bookings ahead of summer 2024 necessitated more price stimulation than originally expected as Ryanair maintained its ‘load active/yield passive’ pricing policy.  Many customers are switching to Ryanair for our lower air fares. As a result, we are capturing record share gains across most markets,” Mr O’Leary said.

“We continue to target between 198 million and 200 million passengers in FY25 [which would represent yearly growth of 8%], subject to no worsening of current Boeing delivery delays, he added.

Geoff Percival
Geoff Percival
Geoff has worked in business, news, consumer and travel journalism for more than 25 years; having worked for and contributed to the likes of The Irish Examiner, Business & Finance, Business Plus, The Sunday Times, The Irish News, Senior Times, and The Sunday Tribune.
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