Ryanair has reported a sharp dip in quarterly profit despite strong demand for travel, as average flight fares decreased substantially.
Profit after tax fell 46 per cent year-on-year, from €663m (£558m) to €360m (£303m), while revenue declined one per cent to €3.63bn (£3bn). Passenger numbers grew 10 per cent to 55.5m
At the same time, the average cost of booking on one of its flights declined 15 per cent when compared with the prior. It means the 55.5m passengers who flew with Ryanair over the quarter, up 10 per cent, paid €41.93 (£35.30) on average.
Chief executive Michael O’Leary warned shareholders that fares in the upcoming quarter would be “materially lower than last summer.”
“While Q2 demand is strong, pricing remains softer than we expected,” he said in a statement.
The fall in profit came alongside a rise in operating costs, which jumped 11 per cent from €2.95bn (£2.5bn) to €3.26bn (£2.8bn) in the three months to July. According to the low-cost carrier, this was down to a combination of Boeing delivery delays and higher handling and air traffic control fees.
Ryanair said it had 156 Boeing 737 Gamechangers at 30 June and expected this to increase to over 160 by the end of July.
“We continue to work with Boeing and have noted an improvement in the quality and frequency of deliveries during the first quarter,” O’Leary said.
He added that an anticipated eight per cent rise in full-year traffic, to between 198m and 200m, would be subject to no worsening in the issues plaguing the US planemaker.