Ryanair shares hit after it warned of cheaper summer flight prices

Ryanair’s (NASDAQ:RYAAY) New York listed shares plummeted nearly 20% in Monday’s trade, as Europe’s leading budget airline reported disappointing financials and warned of a softening of air fares this summer.

The airline’s first quarter profit fell by 46% to €360 million, as average fares declined 15% to €41.93.

Lower fares took a substantial bite out of Ryanair’s margins, given that passenger numbers actually increased to 55.5 million.

Moreover, it warned that fares for the summer season will be significantly lower than last year.

Ryanair highlighted its need for increased discounting, as consumers were increasing cautious and cost conscious.

On the other side of the airline’s ledger, operating costs rose by 11% as higher wages more than offset recent savings on fuel costs.

Besides the softer fares, Ryanair also noted the recent operational impacts of last week’s global IT outage – caused by the Crowdstrike / Microsoft software update – and also air traffic control strikes in France.

Chief executive Michael O'Leary, meanwhile, told investors that Ryanair’s performance over the rest of the summer would be highly dependent on last-minute bookings, particularly in August and September.

In a statement, the airline added: “As is normal at this time of year, we have almost zero Q3 and Q4 visibility, although Q4 will not benefit from last year’s early Easter.

“It is too early to provide meaningful FY25 PAT guidance, although we hope to be able to do so at our H1 results in Nov.”

In New York, Ryanair shares were down $20.81 or 18.2% changing hands at $93.51.