Ryanair Announces Price Increases Following Profit Decline
The airline reports a 16% drop in profits despite record passenger numbers, leading to a forecast of rising fares in 2025.
Ryanair, the Irish low-cost airline, has announced plans to increase its fares throughout 2025 after reporting a 16% decline in profits for its latest fiscal year.
The airline transported over 200 million passengers during this period, setting a record, yet low ticket prices have significantly impacted its profitability.
The airline cited a 7% decrease in fares as a primary issue, attributed to reduced bookings through online travel agencies and higher advertising expenditures.
Additionally, the timing of Easter holidays, which fell in April this year, fell outside the analyzed fiscal period, affecting revenue.
Looking ahead to the summer, Ryanair forecasts fare increases of between 5% and 6%, particularly during the peak season.
Strong demand and a shortage of aircraft in Europe are constraining available capacity, providing room to raise prices without risking a loss of customers.
Ryanair's growth has been limited to 3% this fiscal year, primarily due to delays in the delivery of 29 new Boeing aircraft.
Although the airline currently operates 181 units of the 737-8200 model, manufacturing delays have hindered its expansion plans.
In terms of cost management, Ryanair has maintained its expenditure per passenger.
The company secured 85% of its fuel requirements for this year at an average price of $76 per barrel, with 36% of next year's fuel covered at an even lower price of $66 per barrel.
The airline has reported cash reserves of 4 billion euros and a net treasury of 1.3 billion euros, even after investing in its fleet and share buybacks.
It plans to repay 2.1 billion euros in bonds with its own funds between the end of 2025 and mid-2026. Additionally, the group announced a new share buyback program worth 750 million euros and will propose a final dividend payment in September, pending approval.
Ryanair aims to normalize aircraft deliveries to achieve its target of reaching 300 million annual passengers before 2034. This summer, Ryanair has launched over 160 new routes and is optimistic about recovering some lost revenues, although it acknowledges that the overall outcome will depend on last-minute bookings.
The airline transported over 200 million passengers during this period, setting a record, yet low ticket prices have significantly impacted its profitability.
The airline cited a 7% decrease in fares as a primary issue, attributed to reduced bookings through online travel agencies and higher advertising expenditures.
Additionally, the timing of Easter holidays, which fell in April this year, fell outside the analyzed fiscal period, affecting revenue.
Looking ahead to the summer, Ryanair forecasts fare increases of between 5% and 6%, particularly during the peak season.
Strong demand and a shortage of aircraft in Europe are constraining available capacity, providing room to raise prices without risking a loss of customers.
Ryanair's growth has been limited to 3% this fiscal year, primarily due to delays in the delivery of 29 new Boeing aircraft.
Although the airline currently operates 181 units of the 737-8200 model, manufacturing delays have hindered its expansion plans.
In terms of cost management, Ryanair has maintained its expenditure per passenger.
The company secured 85% of its fuel requirements for this year at an average price of $76 per barrel, with 36% of next year's fuel covered at an even lower price of $66 per barrel.
The airline has reported cash reserves of 4 billion euros and a net treasury of 1.3 billion euros, even after investing in its fleet and share buybacks.
It plans to repay 2.1 billion euros in bonds with its own funds between the end of 2025 and mid-2026. Additionally, the group announced a new share buyback program worth 750 million euros and will propose a final dividend payment in September, pending approval.
Ryanair aims to normalize aircraft deliveries to achieve its target of reaching 300 million annual passengers before 2034. This summer, Ryanair has launched over 160 new routes and is optimistic about recovering some lost revenues, although it acknowledges that the overall outcome will depend on last-minute bookings.
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