In the three months ending June, Ryanair’s profits fell by nearly half due to a 15% decrease in ticket prices compared to the same period the previous year, as customers refused to pay exorbitant costs for last-minute flights.
With its results falling well short of analyst forecasts, Ryanair, the largest airline in Europe by passenger count, saw a 14% decrease in shares by 10:45 GMT. This underscored concerns about a weaker-than-expected summer for airlines as a prolonged post-COVID travel boom wanes.
Rivals Wizz and EasyJet saw their share prices decrease by 8%. Among the biggest losers in Europe were travel agency Tui and British Airways’ parent company, IAG. In an analyst call, Chief Executive Michael O’Leary informed investors that the trend was weakening and going downward.
“There’s a good chance that prices will drop by ten (%) in Q2,” he stated, referring to the quarter that runs from July to September. “And then, in Q3 and Q4, all bets are off.” O’Leary had predicted “flat to modestly up” fares for the summer in May. According to him, Ryanair has reinstated the lower fares to fill seats. Every time, it has removed the higher-priced last-minute tickets due to a lack of demand for the higher-priced tickets. The first quarter of Ryanair’s fiscal year ended in June with an after-tax profit of 360 million euros ($392 million). This was 46% less than the same period the previous year and significantly less than the 538 million euro profit predicted by the company based on a poll of analysts.
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