From a high-level perspective it's difficult to diagnose air travel as being in anything other than rude health, but there are signs in today's results from Ryanair of potential turbulence on the horizon.
Profit and passenger numbers during the year to the end of March reached record levels, which the latter figure of nearly 184 million travellers easily surpassing the pre-Covid year of 2019. This was despite a 21% increase in average airfares to £49.80 as the budget carrier benefitted from heavy demand in the first half of the year.
But in a rare note of caution from what has been a booming industry since the lifting of travel restrictions, Ryanair chief executive Michael O'Leary warned that "recent pricing is softer than we expected". And with less than 50% of bookings made for the key upcoming period of July to September - the quarter when the airline makes most of its profit - summer pricing could still go "either way".
READ MORE: Ryanair profits soar as ticket prices surge by 21%
As things stand, Ryanair expects ticket prices will be "flat to modestly ahead" of last summer. It had previously forecast that fares in the coming months would be up about 10% on the same period last year.
The company has therefore been cagey on its forward guidance, saying only that it expects to grow passenger numbers by about 8% this year to between 198 million and 200 million people. This will be influenced to a degree by the delayed delivery of new aircraft from Boeing.
While peak travel demand is expected to remain strong, Mr O'Leary conceded that if Ryanair must discount in April, May and June of next year, then "so be it". The Irish carrier has already been forced to reduce fares in particular for mid-week flights during this month and last a bid to stimulate demand.
READ MORE: Airlines take off as demand for overseas holidays soars
The downsizing of the industry following the pandemic took a substantial amount of capacity out of the market, and the ensuing resurgence in demand for air travel has allowed carriers to raise prices and boost profits. According to EU data, average airfares across Europe were between 20% and 30% higher in summer 2023 when compared to 2019.
It seems that consumers' willingness to stump up for increasingly expensive airfares is nearing its limits and while this won't of its own accord trigger a collapse in demand, it will weigh on booming profits enjoyed by the industry of late.
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