Ryanair slashes summer fares as profits slide

Ryanair has said it is cutting its summer fares after profits at the no-frills airline fell by almost 50%.

The company said cost-conscious passengers were cutting back while the timing of Easter holidays had also hit profits before tax, which slumped to €401m (£338m) in the three months to 30 June when compared with a year ago.

Average passenger fares fell by 15% in the period, and the carrier said it would have to offer more discounting in the coming months.

"Fares are now moving materially lower than the prior year and pricing... continues to deteriorate," its boss Michael O'Leary said in a presentation announcing its latest results.

Shares in Ryanair and other airlines fell sharply as experts questioned whether the wider sector would be affected by customer budgets being squeezed during the peak summer travel period.

Ryanair said it now expected fares between July and September to be "materially lower" than last year, rather than "flat to modestly up" as it previously expected.

The typical Ryanair fare in June stood at €41.93 in June, down from €49.07 the year before.

Chief financial officer Neil Sorahan said he thought that consumers were simply being "a little bit more frugal, a bit more cautious" with their money.

He added that after two years of growth in travel demand, "there's a bit of pushback".

Despite the slide in profits, Ryanair's passenger numbers increased slightly in the period, limiting the fall in its overall revenue to just 1%.

However, the weak results may suggest that a post-pandemic boom in pricing enjoyed by airlines could be coming to an end, with other carriers having recently warned over falling ticket prices.

Ryanair said on Monday that its performance over the rest of the summer is "totally dependent" on more last-minute bookings and those in August and September in particular.

Customers are typically waiting longer than usual to book summer holidays, which is thought to be partly a result of the ongoing effects of the cost-of-living crisis.

Earlier in July, Jet2 said there would only be "modest" price increases this summer amid a wave of later bookings to its European destinations.

Lufthansa has also pointed to "negative market trends", while Air France-KLM warned of a financial hit after fewer people than expected booked flights to Paris for the forthcoming Olympic Games.

In early morning trade in London on Monday, Ryanair's share price was down 12.5%, while that of rival carriers such as EasyJet fell 6.51% and Wizz Air 6.56%.