Ryanair warns shareholders of weaker summer fares as profits fall | Business News

Ryanair reported weaker-than-expected profits for its first financial quarter, blaming the need to “stimulate” flight sales amid increased consumer caution.

Europe’s biggest airline by passenger numbers said it had made more discounts than expected in the three months to the end of June, with average fares down 15%, and sees no end in sight to the need for discounts.

Profit after tax fell 46% to €360m (£303m).

Market analysts expected a value above 530 million euros.

Latest Money:
Most parents are worried about not being able to afford summer vacation

The simple carrier reported that revenue per passenger fell 10% overall, with so-called ancillary revenues – i.e. sales that cover additions such as checked baggage – stable.

Operating costs also decreased.

Ryanair reported an 11% increase as higher wages offset lower fuel bills.

Group chief executive Michael O’Leary warned shareholders that rates during the key summer holiday months would fall significantly as a result of the weaker than anticipated consumer outlook.

He indicated that prices continued to fall.

O’Leary told shareholders: “While second quarter demand is strong, prices remain lower than we expected, and we now expect second quarter rates to be materially lower than last summer. [previously expected to be flat to modestly up]”.

He said it was too early to forecast profit for the full financial year, which ends March 31, 2025, given the backdrop of weakening flight prices.

Ryanair also said it has not yet assigned a cost to the disruption caused by the global IT meltdown on Friday, which hit aviation hard, forcing the cancellation of thousands of flights around the world.

The disruption continued into the weekend, with crews and planes out of position.

Other operational pressures that Ryanair has faced in recent times has been the impact of air traffic controller strikes in France.

Ryanair is running a record summer program despite failures in its growth ambitions.

Boeing is behind on deliveries of 737 MAX 8 aircraft, which will allow the airline to improve its efficiency.

Ryanair said it expects to stay within 20 deliveries contracted to Boeing at the end of this month, but said the planemaker, with production volumes constrained due to quality issues, has raised its standards.