Ryanair warns of increased summer prices posting €355m annual loss

The airline's chief executive Michael O'Leary said profit recovery 'remains fragile'
Ryanair warns of increased summer prices posting €355m annual loss

Reuters

Updated: 8.30am. Additional reporting by Press Association.

Ryanair boss Michael O’Leary has warned flight prices will be higher this summer due to soaring demand for European holidays and said getting through airports would be “challenging” for passengers.

His comments came as the Irish airline posted a €355 million loss for the pandemic-hit 12 months to the end of March, but said it was impossible to accurately forecast anything beyond hoping for a return to "reasonable profitability" this year.

Ryanair, which is operating more flights than any other European airline according to air traffic regulator Eurocontrol, said it planned to grow its traffic to 165 million passengers this year, up from 97 million a year ago and a pre-Covid record of 149 million.

Mr O'Leary warned holidaymakers should brace for prices to rise by a “high single-digit per cent” over the peak season as demand for breaks on European beach resorts rebounds thanks to the lifting of pandemic travel restrictions, he told BBC Radio 4’s Today Programme.

He signalled prices would ramp up over the next few months, with peak fares for this summer potentially rising above those seen before the pandemic struck, while capacity across the summer will likely be down by 10-15 per cent.

“For the September-quarter at the moment, based on about 50 per cent of all bookings, we expect prices will be up high single digit per cent.

“It seems to us that there will be higher prices into that peak summer period because there’s so much demand for the beaches of Europe and those price rises going to continue.”

Mr O'Leary added there was also likely to be ongoing delays at airports, particularly those in the UK such as Heathrow and Manchester, which he put down to staff shortages.

Long delays were noted at security in Dublin Airport earlier this year, which led some passengers to miss their flights. However, following the recruitment of additional staff at the airport, waiting times have largely returned to normal.

Profits

Overall, Mr O'Leary said it was "impractical, if not impossible" to provide a sensible or accurate profit guidance range at this time given the potential continued risk the war in Ukraine and Covid-19 poses to booking.

"This recovery remains fragile," Mr O'Leary said in a statement.

He added that while bookings have improved in recent weeks, first-quarter pricing continued to need stimulation.

Ryanair is cautiously optimistic that peak summer fares would be somewhat ahead of pre-pandemic levels due to pent-up demand.

The full-year pre-exceptional loss of €355 million was less than a forecast loss of €370 million in a company poll of analysts and a loss of €1 billion in its previous financial year.

The airline made a profit of €1 billion in the year to March 2020.

Ryanair shares were trading at €13.62 at Friday's close, down 25 per cent in three months, in part due to a surge in fuel prices and concerns about the impact of inflation on European demand.

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