Ryanair faces headwinds as consumers play hardball

Just 34% of September seats have been sold, and less than a fifth of October’s seats

Ryanair boss Michael O'Leary told analysts that Ryanair tried to 'close off some of the cheaper seats' in the hope would-be flyers would cough up a few quid more but they didn't. Photograph Nick Bradshaw
Ryanair boss Michael O'Leary told analysts that Ryanair tried to 'close off some of the cheaper seats' in the hope would-be flyers would cough up a few quid more but they didn't. Photograph Nick Bradshaw

What’s good for the consumer isn’t always good for investors, as Ryanair shareholders well know. Shares slumped 17 per cent after it reported a 46 per cent plunge in profits and warned of sharply lower summer fares.

Consumers are still travelling – Ryanair expects to carry 200 million passengers this year, an 8 per cent increase – but “only at a price”, said Michael O’Leary.

The Ryanair boss told analysts that in each of the previous four weekends, Ryanair tried to “close off some of the cheaper seats” in the hope would-be flyers would cough up a few quid more. However, people aren’t biting, with each weekend seeing 50,000-100,000 fewer bookings than targeted.

The falling share price means Ryanair looks cheap, says Bank of America, trading on just nine times estimated earnings for 2025. Still, investors will wonder how reliable consensus estimates are right now.

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O’Leary wasn’t shy about admitting just how uncertain things are. Currently, just 34 per cent of September seats have been sold. Less than 20 per cent have been sold for October. Thus, with consumers playing hardball, second-quarter fare price declines will be “above 5 per cent” and there could “well be a double-digit decline in pricing”.

If a double-digit price decline is necessary, O’Leary added, “all bets are off” for third- and fourth-quarter pricing. Ryanair benefited from double-digit fare price increases in summer 2022 and again in summer 2023. Today, it’s consumers who are in the driving seat.

Proinsias O'Mahony

Proinsias O'Mahony

Proinsias O’Mahony, a contributor to The Irish Times, writes the weekly Stocktake column