A "recessionary feel around Europe" may be a factor in slower-than-expected growth in airfares, Ryanair CEO Michael O'Leary said on Monday as the low-cost carrier posted record annual profits slightly ahead of expectations.
O'Leary warned two weeks ago that summer fares would likely be lower than the 5% to 10% rise it expected as recently as late April. The airline said on Monday its fresh forecast of flat to modest year-over-year peak summer price growth was "heavily dependent" on last-minute summer bookings.
"It is a bit surprising that pricing hasn't been stronger and we're not quite sure whether that's just consumer sentiment or recessionary feel around Europe but we still see peak travel demand certainly through July and August being strong," O'Leary said in an investor presentation.
"And if we have to discount or cut fares to fill to 94% load factor in April, May and June, then so be it."
The Irish airline, Europe's largest by passenger numbers, also said it would be 23 jets short of the number Boeing was due to deliver by the end of July, and there remained a risk – although "unlikely" – that deliveries could slip further.
Chief Financial Officer Neil Sorahan told Reuters the new Boeing production team in Seattle was delivering planes with "a bit more consistency" and if things went well it could receive two or three more jets by the end of July.
O'Leary said Ryanair will receive "modest" compensation from Boeing for the delays but that the confidential amount does not reflect the quantum of losses suffered from having to recently cut its forecast traffic growth for the year to end-March 2025 to 198 to 200 million passengers from 205 million.
Ryanair flew a record 184 million passengers in the financial year ended March 31, contributing to the 34% year-over-year increase in annual profit to 1.92 billion euros ($2.09 billion)
The result was slightly ahead of the 1.905 billion euros profit expected in a company poll of analysts. Ryanair cut its after-tax profit forecast to a range of 1.85 billion and 1.95 billion euros in January after some online travel agents suddenly stopped selling its flights.
Ryanair said it was too early to be able to provide sensible or accurate after-tax profit guidance for the current financial year.
It also announced a 700 million euro share buyback that it said it would formally launch later this week.