Budget carrier Ryanair has announced that it does not anticipate increasing average ticket prices during the upcoming summer season despite the surge in jet fuel costs.
The airline mentioned that due to consumer uncertainty, passengers are delaying their booking decisions, allowing holidaymakers the opportunity to find affordable deals rather than airlines passing on the increased expenses stemming from the ongoing Middle East conflict.
Ryanair revealed a recent decline in airfares, projecting lower average prices for the three months ending in June. The company revised its summer fare expectations, now forecasting prices to remain relatively stable from July to September, compared to the earlier anticipation of a slight increase during the peak season.
CEO Michael O’Leary stated that pricing has softened in response to economic uncertainties related to elevated oil prices, fuel supply concerns, and potential inflation affecting consumer spending.
Although 80% of its jet fuel requirements are secured at set prices, Ryanair noted a significant cost increase for the remaining 20% due to the Middle East conflict.
However, the airline expressed optimism regarding fuel supply stability post-summer as suppliers adapt to the prolonged closure of the Strait of Hormuz. Ryanair’s finance chief, Neil Sorahan, emphasized their growing confidence in uninterrupted jet fuel supplies, with refiners expanding volumes and exploring alternative supply sources.
Mr. O’Leary highlighted that European airlines are diversifying jet fuel sources beyond the Strait of Hormuz blockade, ensuring a steady supply despite the ongoing Middle East tensions.
Ryanair reported a 40% profit increase to £1.96 billion for the fiscal year ending March 31, slightly surpassing expectations. The company refrained from providing a financial outlook for the upcoming year citing uncertainties surrounding demand and fuel costs.
Similar to other airlines, Ryanair observed a trend of last-minute bookings despite maintaining strong demand. The carrier anticipates a 4% rise in passenger numbers to 216 million for the year ending March 2027, aligning with the growth seen in the previous fiscal year.
Negotiations are nearing completion on an extension to Mr. O’Leary’s contract until 2032, including a 10 million share option plan contingent on share price and profit targets. An earlier share option program could potentially yield O’Leary up to £87 million.