Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Ryanair has said it expects airfares to continue to fall over the winter months amid ongoing pressure on consumer spending, although the declines will be less than previously feared.
Chief executive Michael O’Leary said fares were likely to be down “about five per cent” in the peak second quarter, from July to September.
He cautioned that while he had “no idea” how fares would turn out for the rest of the financial year, it was “reasonable to expect fares will be down five-ish per cent through the second half of this year as well”.
“More people are flying with us this summer but at lower fares than last summer . . .[it’s] good news for our customers, bad news for our shareholders,” said O’Leary.
Shares in the low-cost carrier jumped close to five per cent on the pan-European index in afternoon trading on the better than expected outlook for ticket prices.
Ryanair last month surprised investors when it warned that airfares in the key summer months would be “materially lower” than last year, stoking concerns that the industry’s post-pandemic resurgence was petering out.
The airline at the time said that average fares in the first quarter had fallen 15 per cent to €49 per passenger and that the decline could exceed 10 per cent in the second quarter.
O’Leary said ongoing delays in deliveries of new 737 Max aircraft by Boeing were “challenging” the airline’s growth in 2024.
The US manufacturer is under intense regulatory scrutiny and has had to slow production of its best-selling jet after the mid-air blowout of a door panel on one of its aircraft in January.
The airline had expected to receive seven new jets in July but only got five. It was due to take delivery of 10 in August but O’Leary said “we’ll be lucky if we get five,” including two of the delayed July planes.
“It’s very frustrating dealing with Boeing at the moment,” he added, revealing that he was speaking “weekly” to Stephanie Pope, who was appointed to head the US group’s commercial aeroplane division in March.
Max deliveries originally due next spring were also already sliding, said O’Leary, adding that Boeing has been paying Ryanair compensation.
“I do think Stephanie Pope and the new team are doing a reasonable job but we need to see a lot more evidence of delivery delays being caught up this winter,” said O’Leary.
Read the full article here