Ryanair, Europe’s biggest airline, says airfares will be ‘materially lower’ this summer

London (CNN) — Ryanair said Monday that it expects airfares during the busy summer travel season to be “materially lower” than last year as the low-cost carrier reported a plunge in profits.

Europe’s biggest airline by passenger numbers, comparable in size to Delta Air Lines in the United States, said its average fare fell nearly 15% in the April-to-June quarter from the same period in 2023, to €41.93 ($45.65) from €49.07 ($53.42).

Ryanair (RYAAY) attributed that dip in the first quarter of its financial year, in part, to the timing of the Easter break this year, some of which fell over March.

“While Q2 demand is strong, pricing remains softer than we expected, and we now expect Q2 fares to be materially lower than last summer,” Ryanair’s chief executive Michael O’Leary said in a statement, referring to the crucial July-September period. The airline previously thought fares would be “flat to modestly up,” he added.

In a call with investors Monday, Neil Sorahan, the airline’s chief financial officer, said there was “a bit of push back” on fares from consumers, who were spending more cautiously, according to a Reuters report.

Ryanair reported a 46% fall in profits in the first quarter of the year, to €360 million ($392 million), despite a 10% rise in the number of passengers.

Shares in the airline were trading more than 15% down at 6.20 a.m. ET, with other European airlines also feeling the chill. Shares in British carrier EasyJet were down 8%, and IAG, which owns several airlines including British Airways, had shed 4.4% by the same time.

Ryanair’s latest forecast for fares contrasts with its warning some five months ago that it might have to raise them as much as 10% during the summer, partly because of delays in aircraft deliveries by crisis-hit Boeing.

Boeing has been battling a raft of safety and quality concerns in recent months. In January a piece of fuselage on a 737 Max 9 plane, operated by Alaska Airlines, blew out mid-flight. Since then, further problems have come to light with some 737s, disrupting Boeing’s production schedule.

On Monday, Ryanair said its passenger numbers increased to 55.5 million in the first quarter “despite multiple Boeing delivery delays.” But it also noted that it had seen “an improvement in the quality and frequency” of deliveries from the airplane maker during that period.

For the entire financial year, which runs until the end of March 2025, Ryanair expects its passenger numbers to grow to around 200 million from 184 million — that’s comparable to the roughly 190 million passengers that took Delta flights last year.

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