By Conor Humphries DUBLIN (Reuters) -Ryanair reported on Monday robust demand across Europe and projected that fares would rebound, recovering much of last year's decline that had dented profits as
Ryanair Anticipates Fare Recovery as Consumer Demand Strengthens
By Conor Humphries
DUBLIN (Reuters) -Ryanair on Monday reported robust demand across Europe and projected that fares would rebound to recover much of the decline that dented profits last year as consumers struggled with high interest rates.
Europe's largest low-cost airline reported a 16% fall in annual profit for the 12-month period ended March 31, as softer demand and a dispute with online travel agents drove fares down by 7%.
"Demand is robust all across the network," Chief Financial Officer Neil Sorahan told Reuters in an interview. "We operate into 37 different countries. We're seeing strong summer demands everywhere."
"We're delighted that we're going to be recovering most of that 7% (in fare falls), just not all of it. So, I think that that's a fairly good turnaround."
After-tax profit for Ryanair's financial year came in at 1.61 billion euros ($1.8 billion), in line with a company poll of analysts.
Ryanair said fares for the three months ending in June are expected to rise by a "mid-to-high teen percent" year-on-year, largely driven by the timing of Easter.
Summer bookings are running around 1% ahead of the same period last year, Chief Executive Michael O'Leary said in a video presentation.
The airline expects "modest unit cost inflation" in the current financial year as new aircraft, fuel hedging and cost control help to offset increased air-traffic control charges and higher environmental taxes.
Ryanair flew a record 200 million passengers over the 12 months after trimming an earlier 205 million target due to delivery delays from Boeing. It expects to fly 206 million passengers in the year to March 31, 2026.
"We're in good shape on the deliveries," Sorahan said.
TARIFF THREAT
Ryanair would expect Boeing to honour the agreed prices on current aircraft orders even if the European Union imposes reciprocal tariffs and that the airline would reserve the right to cancel if not, Sorahan said, echoing earlier comments by O'Leary.
"We've a fixed price with Boeing and our suppliers, and we've been very much of the view if tariffs come to pass ... we would expect our suppliers to honour the fixed prices," Sorahan said.
"If we were to see an increase in our prices, then we'd have to reserve our right to delay, cancel, or buy elsewhere," said Sorahan, whose airline is one of Boeing's largest customers.
Shares in the airline, Europe's largest airline by passenger numbers, closed at 22.41 euros on Friday, recovering strongly from a 12-month low of 13.41 euros last July, which followed a 15% fall in average fares in the first quarter.
O'Leary could be in line for a bonus of close to 100 million euros if the share price remains above 21 euros for 28 days. It has been trading above that level since May 2.
($1 = 0.8941 euros)
(Writing by Conor Humphries; Editing by Mrigank Dhaniwala, Sherry Jacob-Phillips and Louise Heavens)
