DUBLIN, Ireland: Ryanair has announced that airfares will be “materially lower” during the peak summer months compared to last year, as the airline reported a significant drop in quarterly profits.
The Irish budget carrier revealed this week that lower prices in the spring led to a 46 percent decline in profits, down to 360 million euros for the three months ending June 30.
The average fare dropped by 15 percent to 42 euros year-on-year, even as passenger numbers increased by 10 to 55.5 million.
Chief executive Michael O’Leary stated, “While second-quarter demand is strong, pricing remains softer than we expected, and we now expect second-quarter fares to be materially lower than last summer.”
Despite the increase in passenger numbers, which helped to mitigate the overall impact on turnover, revenues fell by just one percent to 363 billion euros. Passenger numbers are forecasted to rise by eight percent overall for the financial year.
These figures indicate that the post-pandemic surge in pricing, which benefited airlines, is ending. Other airlines have also recently warned about decreasing ticket prices. Customers are booking summer holidays later than usual, likely due to the cost-of-living crisis.
Earlier in July, Jet2 mentioned only “modest” price increases this summer amid a wave of last-minute bookings to its European destinations. Lufthansa also noted “negative market trends,” and Air France-KLM warned of a financial impact after fewer people than expected booked flights to Paris for the upcoming Olympic Games.
Ryanair added that its performance for the rest of the summer is “totally dependent on close-in bookings and yields in August and September.”
O’Leary also criticized European air traffic controllers for the decrease in flight operations over the period. “In the last 10 days of June, we suffered a significant deterioration in European air traffic control capacity, which caused multiple flight delays and cancellations, especially on first-wave morning flights,” he said.
“This makes it more urgent than ever that the new European Commission and Parliament deliver long-delayed reform of Europe’s hopelessly inefficient air traffic control services.”
