Dublin, Ireland – Irish airline Ryanair saw a significant drop in quarterly profit after tax, leading to a 12.2% decrease in shares on Monday. This decline follows the company’s announcement that fares for the summer months will be lower than initially anticipated, contributing to a 46% decrease in profit after tax for the three months ending in June. Despite an increase in passenger traffic to 55.5 million during the quarter, Ryanair reported weaker-than-expected fares and attributed the profit decline to the Easter season falling into the previous quarter.
The budget airline also mentioned that it is running its “largest ever schedule” this summer, with over 200 new routes and five new bases. CEO Michael O’Leary expressed concerns about the upcoming months, stating that while demand is strong in the second quarter, pricing remains softer than expected. As a result, Ryanair anticipates that fares will be significantly lower than last summer, rather than remaining flat or experiencing a modest increase.
O’Leary acknowledged the lack of visibility for the third and fourth quarter but emphasized that last year’s early Easter will not benefit the fourth quarter. He mentioned that it is too early to provide meaningful guidance for the financial year 2025 but hopes to do so during the H1 results in November. Following Ryanair’s announcement, other European airlines experienced a decline in shares on Monday, with EasyJet, Jet2, and Wizz Air all seeing decreases in their stock prices.
Overall, Ryanair’s challenges in maintaining profit margins in the face of lower-than-expected fares reflect the broader impact of the ongoing pandemic on the airline industry. As companies continue to navigate changing travel trends and consumer behaviors, the path to recovery remains uncertain for many airlines in Europe and around the world.