Ryanair income drop following ticket value cuts

Ryanair reported lower first-half profits after cutting ticket prices in response to a subdued consumer environment.

Europe’s largest airline’s profits declined by 18 per cent to €1.8billion in the six months ending September, despite its total passenger numbers jumping by approximately 10 million to 115.3 million.

It cut average air fares by 10 per cent to €52 owing to consumer spending pressures and fewer bookings through online travel agents ahead of the recent peak summer season.

Lower earnings: Ryanair, whose chief executive is Michael O’Leary (top right), reported its profits declined by 18 per cent to €1.8billion in the six months ending September

Consequently, the company’s scheduled turnover fell by 2 per cent to €5.95billion, although solid reserved seating and onboard sales boosted its overall revenue by 1 per cent to €8.7billion.

‘Many customers are switching to Ryanair for our lower air fares,’ noted Michael O’Leary, chief executive of Ryanair. ‘As a result, we are capturing record share gains across most markets.’

However, operating expenses expanded by 8 per cent to €6.7billion, partly due to staff costs and airport and handling charges each rising by more than €100million, as well as the delayed delivery of Boeing airplanes.

Current strikes by Boeing workers in the United States over pay have held up the arrival of nine B737 Gamechanger aircraft for Ryanair.

While the Dublin-based firm expects these aeroplanes to be delivered in the fourth quarter of the financial year, it cautioned that the risk of ‘further delivery delays remains high’.

It has, therefore, lowered its traffic growth target for 2026 by 5 million to 210 million passengers to ‘avoid being over-scheduled, over-crewed and over-costed.’

Ryanair’s results and revised outlook come a few days after O’Leary warned the airline would cut flights to and from UK airports by 10 per cent.

He said Chancellor Rachel Reeves’ ‘idiotic decision’ to increase taxes in last week’s Budget on airline tickets will make air travel ‘much more expensive’ for holidaygoers and the UK less competitive.

The UK Government announced that air passenger duty for short-haul economy flights would rise by £2 to £15 from 2026/27, while private jet users will face a 50 per cent hike in the duty they pay.

O’Leary said: ‘As an island economy on the periphery of Europe, it is vital that the UK lowers air access costs.

‘If Labour are serious about their claims to deliver growth, they should start by scrapping APD. Instead, their first Budget has damaged growth, damaged tourism and damaged air travel.’

Ryanair expects to fly between 198 million and 200 million passengers this fiscal year, dependent on ‘no worsening of current Boeing delivery delays.’

In addition, it said forward bookings indicate robust third-quarter sales whilst the reduction in prices ‘appears to be moderating.’

Susannah Streeter, head of money and markets at Hargreaves Lansdown: ‘The worst of the wariness appears to be easing off, with falls in average fares moderating and some strong forward booking trends emerging.

‘But nosing the performance up significantly from here, given the capacity issues still haven’t been resolved, may still be challenging.’

Wizz Air also released a trading update on Monday, which showed it flew 5.6 million passengers in October, a 4.3 per cent uptick on the same month last year.