Ryanair hikes full-year fare and passenger outlook

The Irish budget airline flew 47.5 million passengers in the third quarter, up 6% year on year.

Ryanair has upped its annual outlook for passenger growth (Nicholas.T.Ansell/PA) (PA Wire)

Ryanair has upped its annual outlook for passenger growth and said full-year profits should increase as it revealed air fares were rising by more than expected.

The budget Irish airline flew 47.5 million passengers in the third quarter, up 6% year on year, and said it now expects 2025-26 passenger growth of 4% to almost 208 million due to strong demand and earlier than expected Boeing plane deliveries.

This is up from previous guidance for 207 million passengers.

Average fares rose 4% to 44 euros (£38.18) in its third quarter to the end of December and the carrier said it now expects fares to rise by up to about 9%, against the 7% increase previously forecast.

Ryanair said it is “cautiously guiding” for full-year underlying profits after tax of 2.13 billion to 2.23 billion euros (£1.84 billion to £1.93 million).

It reported underlying profits after tax of 1.61 billion euros (£1.42 billion) the previous year.

The forecast comes despite its third-quarter figures showing profits tumbled as it set aside money for a competition fine in Italy.

Ryanair saw pre-tax profits plunge 83% to 24.4 million euros (£21.2 million) as it put aside the provision following a 256 million euro (£222 million) fine in December by Italy’s competition watchdog for allegedly using an “abusive strategy” to hinder third-party travel agencies.

The regulator claimed in its ruling that the low-cost airline deliberately made it difficult for agencies to buy flights on its website between April 2023 and at least April 2025.

Ryanair said it was “confident” the “baseless” fine would be overturned on appeal.

With the provision stripped out, underlying net profits fell 22% to 115.4 million euros (£100.1 million).

On the outlook, Ryanair chief executive Michael O’Leary said: “While the fourth quarter doesn’t benefit from Easter, fares are trending ahead of prior year and we now believe full-year fares will exceed the 7% growth previously guided by 1% or 2%.”

He said the full-year profit out-turn “remains exposed to adverse external developments in the fourth quarter, including conflict escalation in Ukraine and the Middle East, macro-economic shocks and any further impact of repeated European air traffic control strikes and mismanagement”.

He added: “Industry capacity constraints, combined with our widening cost advantage, strong balance sheet, low-cost aircraft orderbook and industry-leading operations resilience will, we believe, facilitate Ryanair’s controlled profitable growth to 300 million passengers a year by 2033-34.”

The update comes after a spat erupted last week between Mr O’Leary and Elon Musk over whether the tech billionaire’s Starlink internet system could be used to provide wifi on Ryanair flights.

After Mr O’Leary said this was not feasible, Mr Musk called Mr O’Leary an “idiot” and “chimp” and mused on X whether he should buy the airline.

Mr O’Leary claimed the “PR spat” had driven a 2% to 3% increase in sales.