Irish people may not benefit from cheaper than expected flights this year because of a passenger limit at Dublin Airport, according to airline Ryanair.
Its chief executive Michael O’Leary said on Monday that air fares were not increasing at the pace Ryanair expected as the airline reported a €1.92 billion profit for its last financial year and pledged to return €700 million to shareholders.
Peak prices are more likely to rise by “zero to 5 per cent” rather than the “5 to 10 per cent” that the carrier previously expected, Mr O’Leary told analysts.
However, Neil Sorahan, Ryanair’s chief financial officer, agreed that the 32 million a-year passenger limit at Dublin Airport could prevent Irish people from benefiting fully from cheaper-than-expected flights this year.
“That’s going to have a big impact, especially in the winter months. You’re looking at very high fares if you want to get away for Christmas or midterms,” he added.
The Irish Aviation Authority has limited airlines at Dublin Airport to 14.4 million passengers over the winter to aid the airport’s operator, DAA, in remaining within the overall 32 million limit.
Mr O’Leary stressed that Ryanair had not expected a third consecutive summer of 20 per cent-plus ticket price increases.
However, he conceded that demand had been lower than anticipated in the weeks since the end of Ryanair’s financial year on March 31st.
“There is some degree of consumer resistance, there’s not a lot of confidence across Europe,” he observed.
Mr O’Leary added that if needed the airline would be “aggressive on pricing” to boost demand and pointed out that seat sales run in the weeks since March prompted a good response from customers.
He argued that delays in aircraft deliveries and maintenance issues with engines used on some Airbus aircraft were contributing to a shortage of seats in Europe, which will keep upward pressure on fares over the medium term.
Ryanair’s average fare rose 21 per cent to €49.80 over the 12 months to the end of March, the airline’s financial year.
A record opening six months, which included last summer, and strong Easter traffic in late March aided this growth.
Revenues rose 25 per cent to €13.44 billion from €10.78 billion in the previous financial year, while profit after tax climbed 34 per cent to €1.92 billion from €1.43 billion.
“Given current surplus cash, the board has approved a €700 million share buyback now, which will formally launch later this week,” said Mr O’Leary.
Delivery of new Boeing 737 Gamechanger aircraft will be 23 short of what the airline contracted with the manufacturer, according to Mr O’Leary.
“There remains a risk that Boeing will slip further,” he cautioned.
Ryanair had 146 of these aircraft, which burn less fuel while carrying more passengers than earlier models, at the end of March and now says it hopes to increase this to 158. Mr Sorahan said that figure could reach 161.
Mr O’Leary told Bloomberg News that the airline was around 30 per cent booked for the peak July, August and September months and anticipated strong bookings into summer.
In a statement earlier on Monday, he said it was “too early to be able to provide sensible or accurate full-year 2025 profit after tax guidance”.
Meanwhile, former British home secretary, Amber Rudd and Jinane Laghrari Laabi have joined Ryanair’s board.
Ms Rudd was a Tory MP until 2019 and served in various British cabinet posts. Ms Laghrari Laabi is a former partner with consultants McKinsey & Co covering Morocco, Africa and the Middle East. She is a director of Moroccan listed company, Aluminium Du Moroc.
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