Ryanair reveals average fares declined by a tenth this year amid pressure on consumer spending

It reported a pre-tax profit of 2.1 billion euros (£1.8bn) for the six months to the end of September, 16 per cent lower than the same period last year.

Earnings were affected by average air fares declining by a tenth year on year, which it said was partly driven by pressure on consumer spending amid higher interest rates and efforts to offset higher living costs.

But lower prices also brought in more customers, with the airline reporting a 9 per cent jump in total passengers to a record 115 million for the half-year period.

Ryanair said it is expecting to fly some 200 million passengers over the full year, with demand for flights remaining strong in recent weeks.

But this is subject to there being “no worsening of current Boeing delivery delays”, referring to ongoing strikes among the aerospace giant’s factory workers that have halted production of its aircraft.

Ryanair also said future flights could be affected by staff shortages and the ongoing risks from the conflicts in Ukraine and the Middle East.

The decline in prices has also started to ease off recently, according to the group.

Commenting on the update, AJ Bell investment director Russ Mould said: “For a time, it felt like airlines and travel companies could pass on any costs to travellers as post-pandemic demand to get away was so strong.

"Combined with relatively limited capacity you had the recipe for strong returns for carriers like Ryanair which were in a financially and operationally robust position.

“However, it looks like the sunny days for the sector are behind it, based on Ryanair’s latest numbers.

"It saw its first-half profit stripped down by the impact of lower fares over the crucial summer period as consumers’ capacity and willingness to splash out receded.

Mr Mould added: “There have been some signs of improvement in recent weeks but it remains to be seen if these will be sustained.

“Like several of its peers, Ryanair is also facing a knock-on effect from the production problems and industrial action at Boeing and, tellingly, has trimmed its forecast for passenger growth.

"The company also announced plans to cut UK flights thanks to the increase in passenger duty in the recent Budget.

“Separately, Wizz Air reported an uptick in passenger numbers for October and an increase in how full its planes are.

"However, investors will have to wait until the first-half results for the more significant news of how the business is doing when it comes to fares and profitability.”

In September, Jet2 reported a sharp rise in the number of seats it had available this summer, with 17.2 million seats on sale over July and August.

The figure was 12.4 per cent higher than last year, and comes amid a trend towards late bookings as customers hunt for last-minute deals.

Ryanair and Wizz Air also announced they had set new records for passenger numbers in August.

Dublin-based Ryanair said it carried 20.5 million passengers in August.

That was 8 per cent more than the 18.9 million during the same month last year.

Hungarian carrier Wizz Air said it carried 6.2 million passengers in August, a 1.0 per cent increase from August 2023.