Ryanair touts lower fares to fill planes as costs start to bite

afr.com:

Ryanair lowered its full-year traffic prediction and said it may need to cut ticket prices to fill seats as passengers become more cost-sensitive.

The Irish low-cost airline could introduce “fare stimulation” toward the end of the year to meet seat capacity that’s set to be 25 per cent higher than pre-pandemic levels, Ryanair said on Monday as it reported earnings that beat estimates. With limited to no visibility into the next quarters, chief financial officer Neil Sorahan said the airline will push its advantage with low fares.

“We want to fill the planes, and we’ll price whatever needs to be priced to do so,” he said. “It’s too early at this stage to call where fares will go.”

Robust demand for summer vacations has boosted airlines’ balance sheets this year following a period of restricted travel during the COVID-19 pandemic. But concern is mounting about demand after the busy summer travel season as consumers face soaring inflation and mortgage costs and as the rush to return to flying after lockdown risks running out of steam.

word Bloomberg

Before Monday, shares had climbed about 35 per cent this year, compared with 47 per cent advance at EasyJet and 40 per cent at Wizz Air. Ryanair was the second major European airline to report earnings for the quarter, following EasyJet, which reported on Friday and left some analysts wondering if it can meet expectations in its final fiscal quarter.

Ryanair chief executive Michael O’Leary previously said that ticket prices would remain elevated for the next five years because of higher oil prices and environmental charges. Ryanair, which has built its business model around ultra-cheap flights, said in May the typical €9.99 fare could double in price as summer demand skyrockets