Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Ryanair has reported a fall in profit over the summer following a drop in ticket prices and has been forced to trim its passenger forecasts because of Boeing delivery delays.
Europe’s largest low-cost airline on Monday reported net profit of €1.79bn for the six months to the end of September, an 18 per cent decline from a year earlier.
Chief executive Michael O’Leary put the 10 per cent fall in average ticket prices to €52 down to factors including “consumer spending pressure” and higher interest rates.
But he said passengers were still keen to travel, and the “decline in pricing appears to be moderating”.
“Forward bookings suggest that demand [in the current quarter] is strong,” O’Leary said.
Fares fell 15 per cent in the company’s first fiscal quarter, which runs from April to June, and 7 per cent in its second.
Ryanair’s decision to discount fares to ensure its planes were busy led it to carry a record 115mn passengers in the first half of its financial year.
The Irish carrier is the first European low-cost airline to reports results this quarter, and its commentary on ticket prices and demand for travel will be closely watched.
Ryanair sparked alarm among European airlines in July when it warned of materially lower air fares over the summer months, in a turnaround from rising ticket prices following the end of pandemic lockdowns, when passengers were desperate to travel and the industry suffered from a shortage of aircraft.
But analysts said ticket prices had not fallen as far as some airline investors feared.
“The all-important fare pressure looks to be moderating . . . This further suggests the fare weakness seen in the spring is temporary,” analysts at Bernstein said.
German airline group Lufthansa reassured investors over strong passenger demand, particularly in business and first class, when it reported results last week, and forecast its planes would be busier in November and December than last year.
Ryanair is also dealing with delays in deliveries of the Boeing 737 single-aisle aircraft, with the US manufacturer contending with production problems and a workers’ strike.
The airline on Monday cut its passenger growth forecast in its next financial year from 215mn to 210mn and said it expected the remaining nine aircraft scheduled to be delivered in the current quarter to slip into next year owing to the recent strikes.
“While we continue to work with Boeing leadership to accelerate aircraft deliveries ahead of peak summer 2025, the risk of further delivery delays remains high,” O’Leary said.
Still, Ryanair maintained a long-term target of 300mn passengers annually over the next decade and said it expected “modest” compensation from Boeing because of the problems.
