Great news before the holidays. Airline ticket prices will be lower

Michael O'Leary, CEO of Ryanair, delivered great news just before the summer travel season begins. The head of the Irish brand announced record profits and optimistic predictions for airline tickets. It turns out that their prices may be much lower than previously expected.

Will airline ticket prices be lower?

Annual profits for low-cost airlines are at record levels despite rising fuel prices, higher staff costs and delays in aircraft deliveries. Ryanair, which is one of Europe's most popular airlines, reported an after-tax profit of €1.92 billion in the year to March, an annual increase of 34%.

The total exceeds the previous annual record of €1.45 billion, set in the year ending March 2018, and is above the €1.905 billion forecast by the company's analysts.

Ryanair's performance improved thanks to a 9% increase in passenger traffic combined with a 21% increase in average ticket price. Despite this jump in consumer costs, the airline said it continues to gain a “competitive advantage” by maintaining lower fares than its EU competitors.

Michael O'Leary also announced the most important information for customers – summer ticket prices will probably be lower than the 5-10% increase expected at the end of April.

He said that while prices may change, maximum tariff rates will be set at levels “flat or slightly higher” than those seen last summer.

“It's a bit surprising that prices haven't been higher and we're not entirely sure whether it's just a matter of consumer sentiment or a sense of recession in Europe, but we still see that peak travel demand, certainly in July and August, is strong,” O'Leary said. “What if we have to lower ticket prices to meet the load factor to 94 percent? in April, May and June, so be it,” he added.

Challenges of the aviation industry

Although Ryanair reported strong profits, the year was not without its challenges. The airline saw higher staff expenses and a 32 percent increase in fuel costs. Delivery delays were also significant, especially due to the Boeing production crisis.

Ryanair said it would be short of 23 Boeing 737s that were due for delivery by the end of July. “We continue to work closely with Boeing's CEO, CFO and new management team to improve quality and accelerate delivery of B737 aircraft,” Ryanair announced in its profit and loss statement. “There remains a risk that Boeing's deliveries could decline even further,” the airline added.

Depending on these deliveries, Ryanair expects to increase its traffic by 8% in the coming year, serving between 198 and 200 million passengers.