Ryanair profits cut in half as pressure put on fares

Adam Vettese, analyst at investment platform eToro, says: ”Fare weakness continues to plague Europe’s largest low-cost airline as Q1 profit is slashed by almost half in comparison with last year. It seems the demand is still there but consumers are being a little more price conscious and are now pushing back against higher fares, forcing Ryanair to drop prices to maintain their targeted 95% load factor. This in turn has seen the firm issue a cautionary note that we may see more of the same during the key July-September quarter where most airlines traditionally make the lion’s share of their money for the year.

“This isn’t the only factor which has put shares under pressure since their April all-time high. Delayed deliveries of Boeing aircraft, air traffic control strikes as well as most recently a global IT outage have all contributed to disruption and in turn additional cost. Whilst many of these issues are either isolated or short-term, if there is a more permanent shift in price trends, then it would be difficult to see Ryanair’s full year outlook remain unaffected and the firm will need to rethink its forecasts.”