Ryanair’s profits are falling due to the reduction in ticket prices
- Ryanair reported that its profits fell to €1.8 billion in the six months ended September
- It cut average airfares by 10% to €52 due to pressure on consumer spending
Ryanair reported lower profits in the first half of the year after cutting ticket prices in response to a subdued consumer environment.
Profits at Europe’s largest airline fell 18 percent to 1.8 billion euros in the six months ended September, despite total passenger numbers rising by about 10 million to 115.3 million.
Average airfares have been reduced by 10 percent to €52 due to pressure on consumer spending and fewer bookings through online travel agencies in the run-up to the recent summer season.
Lower revenues: Ryanair, whose CEO is Michael O’Leary (above right), reported its profits fell 18 percent to €1.8 billion in the six months ended September
As a result, the company’s planned revenue fell 2 percent to €5.95 billion, although solid reserved seat and on-board sales increased total revenue by 1 percent to €8.7 billion.
“Many customers are switching to Ryanair because of our lower airfares,” said Ryanair CEO Michael O’Leary. “As a result, we are achieving record share gains in most markets.”
However, operating costs rose by 8 percent to 6.7 billion euros, partly due to personnel costs, airport and handling costs that each rose by more than 100 million euros, and the delayed delivery of Boeing aircraft.
Current strikes by Boeing workers in the United States over wages have delayed the arrival of nine B737 Gamechanger aircraft for Ryanair.
Although the Dublin-based company expects these aircraft to be delivered in the fourth quarter of the financial year, the company warned that the risk of ‘further delivery delays remains high’.
It has therefore reduced its 2026 traffic growth target by 5 million to 210 million passengers to “avoid overplanning, overstaffing and excessive costs.”
Ryanair’s results and revised guidance come a few days after O’Leary warned the airline would cut the number of flights to and from British airports by 10 percent.
He said Chancellor Rachel Reeves’ “idiotic decision” to increase taxes on air tickets in last week’s Budget will make air travel “much more expensive” for holidaymakers and make Britain less competitive.
The UK government has announced that passenger duty for short-haul economy flights will rise by £2 to £15 from 2026/2027, while private jet users will face a 50 per cent increase in the duty they pay.
O’Leary said: ‘As an island economy on the edge of Europe, it is vital that Britain reduces air access costs.
“If Labor is serious about their claims to deliver growth, they need to start by scrapping APD. Instead, their first budget has damaged growth, tourism and air travel.”
Ryanair expects to carry between 198 million and 200 million passengers this financial year, subject to “no worsening of Boeing’s current delivery delays.”
Additionally, the company said forward bookings indicate robust sales in the third quarter, while the price decline “appears to be easing.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘The worst of the wariness appears to be easing, with the decline in average rates easing and some strong booking trends emerging.
“But it may still be a challenge to significantly improve performance from here on in as capacity issues remain unresolved.”
Wizz Air also released a trading update on Monday, showing it flew 5.6 million passengers in October, up 4.3 percent on the same month last year.
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