Ryanair to increase ticket prices ahead of summer holidays after profits plunge

Europe's largest airline by passenger numbers posted a decline in post-tax profits to €1.6billion (approx £1.3billion) for the 12 months to March 31.

The Irish carrier had previously battled to boost passenger numbers by cutting fare prices, with average tickets dropping from £41.31 to £35.30 year on year during last summer.

Despite cutting fares by seven per cent throughout the year, Ryanair carried a record 200 million passengers in the financial year ending March 2025.

This was slightly below an earlier target of 205 million passengers, with delivery delays from Boeing cited as a factor.

Total revenue increased by four per cent to €14billion (approx £11.7billion), but operating costs jumped nine per cent to €12.4billion approx £10.5billion).

The airline's finance chief Neil Sorahan noted that resurgent demand and the timing of this year's Easter holiday has led to an average increase in fares just shy of seven per cent, compared to a forecast of four to six per cent made in March.

Michael O'Leary, Ryanair's chief executive, pointed to strong summer demand across all 37 countries where the airline operates. He specifically noted that "Europeans appear to be holidaying at home [in Europe] because of what they see as a lack of a reasonable welcome in the US."

The airline reported that summer bookings are running approximately one per cent ahead of the same period last year. The later timing of Easter this year, falling fully in April, has also contributed to the fare increases.

Ryanair has also resolved previous disputes with online travel agents that had negatively impacted passenger volumes the year before.

Ryanair expects to fly 206 million passengers in the year to 31 March 2026, a modest increase from the record numbers achieved last year. The airline's shares have performed strongly, rising 2.8 per cent in early trading to €23.04, recovering substantially from a 12-month low of €13.41 last July.

Chief Executive Michael O'Leary could be in line for a substantial bonus of nearly €100million if the share price remains above €21 for 28 days. The shares have been trading above that threshold since May 2.

O'Leary remained cautious about the airline's financial outlook despite the fare increases.

He said: "While we cautiously expect to recover most but not all of last year's seven per cent fare decline, which should lead to reasonable net profit growth in 2025-26, it is far too early to provide any meaningful guidance."

The airline noted that "summer 2025 demand is strong with peak fares trending modestly ahead of prior year" and that "first-quarter fares will benefit from having a full Easter holiday in April, and weak prior-year comparatives."

Susannah Streeter, head of money and markets at Hargreaves Lansdown, offered an optimistic assessment of Ryanair's position.

"Ryanair's update indicates that the airline will be flying into calmer skies this year, with consumers more willing to withstand hikes to air fares," she said.

"Travellers are brushing off economic uncertainty and appear determined to ring-fence available budgets to spend on trips abroad."

However, she noted that the company had refrained from providing more specific guidance "given the unpredictable nature of geopolitics and trading relationships around the world."

Ryanair's market position remains strong despite challenges, with the company valued at more than €28billion. The airline is holding €4billion in cash, with net cash balances of €1.3billion after borrowings.

The carrier faces ongoing delays in receiving Boeing 737 Max aircraft orders. Of the 210 "gamechanger" aircraft that should have arrived, only 181 are now in Ryanair's fleet of 618 aircraft.

Looking ahead, Ryanair expects inflationary pressures from wages, increasing air traffic control bills and rising environmental costs, including the need to use less carbon-intensive fuel.