Budget carrier Ryanair announced that it does not anticipate raising average ticket prices during the summer months despite a surge in jet fuel costs. The airline mentioned that due to consumer uncertainty, passengers are delaying booking, indicating that travelers can still find affordable deals rather than airlines passing on increased expenses from the ongoing conflict in the Middle East.
Ryanair reported a decline in airfares recently, with average prices expected to be lower in the quarter ending in June. The company revised its forecast for summer fares, now projecting pricing to remain relatively stable from July to September, as opposed to the previously anticipated slight increase during the peak season.
CEO Michael O’Leary stated that pricing has softened in response to economic uncertainties stemming from higher oil prices, fuel shortage concerns, and the potential impact of inflation on consumer spending. While 80% of the airline’s jet fuel needs have been secured at set prices, the remaining 20% has seen a price spike due to Middle East tensions.
Despite the increased fuel costs, Ryanair expressed confidence in the jet fuel supply chain post-summer, as suppliers adapt to the prolonged closure of the Strait of Hormuz. The company’s finance chief, Neil Sorahan, noted growing assurance that jet fuel supplies will remain uninterrupted even after summer, with refiners expanding volumes and seeking alternative oil sources.
O’Leary highlighted that European airlines are diversifying their jet fuel sources to mitigate challenges posed by Iran’s blockade of the Strait of Hormuz. He emphasized that although the Middle East conflict has caused economic uncertainty, Europe continues to receive significant jet fuel volumes from regions like west Africa, the Americas, and Norway.
Ryanair recently reported a 40% profit increase, reaching £1.96 billion for the year ending March 31, slightly exceeding expectations. The company refrained from providing a financial outlook for the upcoming year due to uncertainties surrounding demand and fuel prices.
Similar to other airlines, Ryanair noted a trend of last-minute bookings but maintained that demand remains strong. The airline anticipates a 4% increase in passengers for the year ending March 2027, aiming to match the 4% growth witnessed in the previous fiscal year.
Negotiations are nearly finalized for an extension of Mr. O’Leary’s contract until 2032, which includes a 10 million share option agreement contingent on share-price and profit targets. An earlier share option scheme could potentially earn O’Leary up to £87 million.