Ryanair profits fall as passengers hold out for lower fares

Ryanair profits have fallen sharply during the big money-making summer season as passengers turned their back on higher fares and the carrier admitted that it had been “over-scheduled, over-crewed and over-costed”.
The Dublin-based airline, Europe’s largest and vying with easyJet to be the UK’s busiest, also announced that it was cutting its projected passenger growth next year partly because of delays in the delivery of Boeing 737Max aircraft due to the plane manufacturer’s operational and industrial relations crisis. Ryanair said it still expected to carry up to 200 million passengers in the year to next March but for the year after it has moderated its target from 215 million to 210 million passengers.
For the first half of its financial year, the six months to the end of September, Ryanair reported an 18 per cent fall in profits after tax from €2.18 billion to €1.79 billion despite revenues being up marginally at €8.69 billion on a 9 per cent rise in passenger numbers to 115 million.
The figures show that Ryanair’s passengers appear unwilling to continue paying the higher fares that the airline pushed through after the pandemic when it took advantage of pent-up demand with too many travellers and holidaymakers chasing too few available seats across the European airline industry.
The company reported that in the peak July, August and September season it cut its average fares by 7 per cent to €61.
Michael O’Leary, 63, Ryanair’s chief executive of the past 30 years, blamed that on “consumer spending pressure driven by higher-for-longer interest rates”.
The numbers also show that passengers are spending marginally less on Ryanair’s ancillary charges for baggage, seat-choosing and in-flight spending. Average per-passenger ancillary revenues during the summer fell to a little under €24.
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Ryanair has received 172 of the new Boeing 737Max aircraft it has ordered, a larger model than the previous generation of Boeing 737s and more fuel efficient.
The airline warned, however, that Boeing was unlikely to hit future agreed delivery schedules. Of a further 14 aircraft due to be delivered in the next few weeks, nine will be delayed until the following quarter. Of a further 25 that had been expected to be delivered for next year’s summer peak season, Ryanair is all but giving up hope of seeing them in time.
“Frankly, it’s a pain in the backside,” O’Leary said. “The risk of further delivery delays remains high. We believe it is therefore sensible to moderate Ryanair’s traffic growth target in the year to March 2026 to 210 million passengers, previously 215 million, to reflect these delivery delays, as we wish to avoid being over-scheduled, over-crewed and over-costed as we were in summer 2024.”
Flying fewer planes than previously forecast means that the airline will be able to better defend the money it makes per passenger, O’Leary said.
He believes demand in the current quarter including the key Christmas season remains strong but only because it is continuing to drop its fares.
Despite its falling profits, Ryanair’s coffers remain overflowing. Even after a €1 billion buyback of shares in recent months, the company has €600 million of net cash on its balance sheet and said that it would be distributing a 22.3 cent per share dividend at a cost of €244 million. Just shy of €10 million of that will go to O’Leary as a 3.9 per cent shareholder in the company.
On the Euronext exchange, Ryanair stock, which values the company at €19.6 billion, trod water in Monday trading at €18 apiece, up from a low of less than €14 during the summer, which had followed a sell-off from a high of more than €21 in the spring.