: Ryanair says ultra-low-cost fares are going the way of the dinosaur

by | May 22, 2023 | Stock Market

One of Europe’s biggest budget airlines has said it before, and it’ll say it again: The era of deep flight discounts is probably over. The latest comments to that effect came Monday from Ryanair’s chief financial officer, Neil Sorahan, in an interview with Bloomberg in which he also maintained that the airline will always be competitive on fares because of its low cost base.

Shares of Ryanair

rose over 2% after the airline reported a swing to a net profit of €1.31 billion ($1.42 billion) for the year ended March 31 , as it cited a 74% rise in traffic and fares running 10% above prepandemic levels. Airlines globally have been enjoying a strong rebound from the early days of the COVID-19 pandemic, with passengers seemingly willing to pay up. Last August, Michael O’Leary, Ryanair’s boss, warned that ultracheap promotional fares would not be seen for “the next number of years,” due to surging fuel costs. Crude-oil prices
were near $90 a barrel at the time of that O’Leary interview, partly as a consequence of Russia’s invasion of Ukraine. They are now just over $71 a barrel. Ryanair’s Sorahan said the advent of bigger Boeing
planes, which are expected to have 21% more seating, may in time help lower prices.

“‘I think you won’t see any €9.99 fares, but you will see €19.99 fares.’”

— Ryanair CFO Neil Sorahan

Yet even if fliers get promotional fares, often extra fees and surcharges will drive their total cost higher. A study published by the financial news website Tradingpedia in April found that Ryanair has the most hidden fees among a batch of European airlines — totaling as high as €220. Also grabbing attention on Monday were Ryanair’s passenger-traffic projections. The Swords, Ireland–based carrier expects 300 million annual passengers by 2034, up from 169 million in 2023, driven by the 300 bigger Boeing 737-MAX-10 planes the airline has bought and which will be phased in between 2027 and 2033.


Article Attribution | Read More at Article Source

Share This