Europe’s largest budget airline Ryanair has reported a significant decline in profits during its crucial summer season, as passengers increasingly rejected elevated fare prices. The carrier acknowledged being “over-scheduled, over-crewed and over-costed” during the peak holiday period.
The Dublin-based aviation giant saw after-tax profits drop 18 per cent to €1.79 billion in the first half of its financial year, despite carrying 115 million passengers – a 9 per cent increase. The results highlight a growing resistance to the carrier’s post-pandemic pricing strategy, which had previously capitalised on pent-up travel demand.
Chief Executive Michael O’Leary attributed the downturn to “consumer spending pressure driven by higher-for-longer interest rates,” as the airline was forced to reduce average fares by 7 per cent to €61 during the peak July-September quarter. Ancillary revenues also witnessed a modest decline, with per-passenger spending on extras like baggage and seat selection falling to just under €24.
The airline has also scaled back its passenger growth forecasts for the coming year from 215 million to 210 million, citing ongoing delays in Boeing 737 Max aircraft deliveries. Of 14 aircraft expected in the coming weeks, nine face delays, while 25 planes scheduled for next summer’s peak season are increasingly unlikely to arrive on schedule.
Despite these challenges, Ryanair maintains a robust financial position with €600 million in net cash after completing a €1 billion share buyback. The company has announced a dividend of 22.3 cents per share, totalling €244 million, with CEO O’Leary set to receive approximately €10 million through his 3.9 per cent shareholding.
The airline’s stock, currently valuing the company at €19.6 billion, has shown resilience on the Euronext exchange, trading at €18 per share – a notable recovery from summer lows of €14, though still below the spring peak of €21.
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