Ryanair profit misses by 7% as summer fares set to fall

Ryanair reported Q1 after-tax profit of €538 million, missing analyst forecasts by 7.1 percent, and warned summer fares will be modestly lower.

"The Middle East conflict led to consumer hesitancy, concerns about EU jet-fuel shortages, economic uncertainty and later bookings," Chief Executive Michael O'Leary said in a statement.

First-quarter average fares fell 6 percent from a year earlier. Analysts in a company poll had expected profit of €579 million. At its May results, Ryanair said it was discounting some prices to keep volumes up and warned fares could be broadly flat in the July-September period.

"Despite a recent, slight, uptick in volumes, and less price stimulation, Q2 pricing is trending modestly down year-on-year and the final H1 fare outcome is heavily dependent on the strength of close-in bookings in August and September," O'Leary said. Close-in bookings — last-minute reservations — are the main source of profit for budget airlines.

The profit miss and cautious outlook point to margin pressure for Europe's largest airline by passenger numbers as geopolitical uncertainty weighs on travel demand. Rival carriers easyJet and Wizz Air face similar headwinds from the Iran conflict and elevated jet fuel costs. Investors will watch August and September booking data for signs of whether the summer season can recover.

This article is for informational purposes only and does not constitute investment advice.