Budget airline Ryanair has stated that it does not anticipate raising average ticket prices during the summer season despite the surge in jet fuel costs. The company noted that due to consumer uncertainty, passengers are delaying their booking decisions, creating opportunities for travelers to find affordable deals rather than airlines passing on increased expenses from the ongoing Middle East conflict.
Ryanair reported a recent decrease in airfares, with average prices projected to be lower in the three months leading up to the end of June. The airline revised its summer fare outlook, now expecting prices to remain “broadly flat” from July to September, compared to the previous forecast of a slight increase during the peak season.
Michael O’Leary, Ryanair’s CEO, mentioned that pricing has softened in response to economic uncertainties stemming from higher oil prices, fuel supply concerns, and potential inflation impacting consumer spending. The company has secured pricing for 80% of its jet fuel needs but faces increased costs for the remaining 20% due to the Middle East conflict.
Despite initial concerns about fuel shortages resulting from the closure of the Strait of Hormuz, Ryanair expressed growing confidence in the continuity of jet fuel supplies post-summer as suppliers adapt to the situation. The airline’s finance chief, Neil Sorahan, reassured that efforts to increase fuel volumes and explore alternative supply sources are in place to mitigate disruptions.
European airlines, including Ryanair, are diversifying jet fuel sources to counter the effects of Iran’s blockade of the Strait of Hormuz. O’Leary highlighted that Europe maintains adequate jet fuel supply from regions like west Africa, the Americas, and Norway, despite ongoing uncertainties in the Middle East.
Ryanair announced a 40% increase in profits to £1.96 billion for the fiscal year ending on March 31, surpassing expectations. The company refrained from providing a financial outlook for the upcoming year due to uncertainties surrounding demand and fuel prices.
Similar to its industry counterparts, Ryanair noted a trend of last-minute bookings, although it reported strong demand. The airline anticipates a 4% growth in passenger numbers, projecting to carry 216 million passengers by March 2027, aligning with the growth seen in the previous fiscal year.
Negotiations are near completion for an extension of Michael O’Leary’s contract with Ryanair until 2032, accompanied by a share option agreement of 10 million shares, subject to performance targets. An existing share option scheme could potentially earn O’Leary up to £87 million.
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