Financial Struggles and Lower Profits
Ryanair’s financial results for the first quarter of the 2025 fiscal year have shown a notable decline in profits and a cautionary outlook for summer fares. The airline reported a profit of €360 million, which fell significantly short of the €530 million analysts had predicted. This figure is also a steep drop from the €663 million profit recorded in the same period last year.
Rising Costs and Decreased Revenue
Despite a 10% increase in passenger numbers, reaching 55.5 million in June 2024, Ryanair’s average ticket prices dropped by 15%, from €49.07 in June 2023 to €41.93 in June 2024. Additionally, operating costs rose by 11%, climbing from €2.94 billion to €3.26 billion over the same period. This combination of higher costs and lower fares resulted in a 1% decrease in revenue, from €3.65 billion last year to €3.63 billion this year.
Summer Fare Outlook and Operational Challenges
Ryanair has warned that summer fares are expected to fall further this year, with unit costs likely to increase due to various expenses, including productivity and pay rises, as well as higher air-traffic control (ATC) and handling fees. The company is also facing challenges from Boeing delivery delays, geopolitical conflicts such as the Russia-Ukraine war, and ATC staffing shortages, which have led to flight cancellations and delays.
Environmental Initiatives and Regulatory Criticisms
CEO Michael O’Leary highlighted Ryanair’s commitment to environmental, social, and governance (ESG) principles, noting that the airline is highly rated by Sustainalytics. He emphasized Ryanair’s use of new aircraft and sustainable aviation fuel (SAF) to enhance environmental efficiency. O’Leary also criticized proposed EU legislation that focuses on monitoring aviation’s non-CO2 impact only for intra-EU flights, calling for a more comprehensive “polluter pays” approach that includes long-haul flights.
Impact of Microsoft Outage and New Partnership with Expedia
Ryanair was among several airlines affected by a Microsoft outage on July 19, which caused check-in delays and other issues. Passengers were advised to arrive at the airport three hours before their flights. In a positive development, Ryanair announced a partnership with Expedia Group, allowing customers to book standalone flights or packages through Expedia and access their Ryanair accounts seamlessly. This collaboration aims to offer travelers greater affordability and convenience by combining Ryanair’s budget-friendly flights with Expedia’s extensive travel services.
SOURCE: Ref Image from Reuters
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