Ryanair’s annual profit down 16%, forecasts fare rebound

Ryanair has today reported robust demand across Europe and projected that fares would rebound to recover much of the decline that dented profits last year as consumers struggled with high interest rates.

Europe’s largest low-cost airline reported a 16% fall in annual profit for the 12-month period ended March 31, as softer demand and a dispute with online travel agents drove fares down by 7%.

Revenue for the year rose by 4% to 13.95 billion from €13.44 billion the previous year.

“Demand is robust all across the network,” Ryanair’s chief financial officer Neil Sorahan said. “We operate into 37 different countries. We’re seeing strong summer demands everywhere.”

“We’re delighted that we’re going to be recovering most of that 7% (in fare falls), just not all of it. So, I think that that’s a fairly good turnaround,” he added.

After-tax profit for Ryanair’s financial year came in at €1.61 billion, in line with a company poll of analysts.

Ryanair said fares for the three months ending in June are expected to rise by a “mid-to-high teen percent” year-on-year, largely driven by the timing of Easter.

Summer bookings are running around 1% ahead of the same period last year, Group chief executive Michael O’Leary said in a video presentation.

The airline expects “modest unit cost inflation” in the current financial year as new aircraft, fuel hedging and cost control help to offset increased air-traffic control charges and higher environmental taxes.

Ryanair flew a record 200 million passengers over the 12 months – which it said marked a first for a European airline. This came after it trimmed an earlier 205 million target due to delivery delays from Boeing. It expects to fly 206 million passengers in the year to March 31, 2026.

“We’re in good shape on the deliveries,” Neil Sorahan said.

Ryanair would expect Boeing to honour the agreed prices on current aircraft orders even if the European Union imposes reciprocal tariffs and that the airline would reserve the right to cancel if not, Mr Sorahan said, echoing earlier comments by Michael O’Leary.

“We’ve a fixed price with Boeing and our suppliers, and we’ve been very much of the view if tariffs come to pass … we would expect our suppliers to honour the fixed prices,” Mr Sorahan said.

“If we were to see an increase in our prices, then we’d have to reserve our right to delay, cancel, or buy elsewhere,” said Mr Sorahan, whose airline is one of Boeing’s largest customers.

Shares in the airline, Europe’s largest airline by passenger numbers, closed at €22.41 on Friday, recovering strongly from a 12-month low of €13.41 last July, which followed a 15% fall in average fares in the first quarter.

Micheael O’Leary could be in line for a bonus of close to €100m if the share price remains above €21 for 28 days. It has been trading above that level since May 2.