A strong rise in fares helped Ryanair to record annual profits but the company has suggested that soaring ticket prices may start coming back to Earth.

The no-frills airline made a pre-tax profit of £1.64 billion during the year to the end of March, up 34% on the previous year and surpassing its previous record of £1.26bn during the year to March 2018. Passenger numbers were 9% higher at 184 million.

Average ticket prices rose by 21% to £49.80 but a further 10% increase in fares that was expected this summer has failed to materialise with prices now predicted to be broadly flat.

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"It is a bit surprising that pricing hasn't been stronger and we're not quite sure whether that's just consumer sentiment or recessionary feel around Europe but we still see peak travel demand certainly through July and August being strong,” chief executive Michael O'Leary said.

He added that if Ryanair must discount in April, May and June of next year, then "so be it". 

Ryanair gave no forward guidance on its financial performance for the current year but did say that it expects to carry between 198 million and 200 million passengers. This will be dictated in part by delays in the delivery of new B737 aircraft from Boeing.

The Irish carrier hopes to have 158 B737s in operation by the end of July, which would be 23 short of contracted deliveries. Boeing has been beset by delays amid scrutiny over safety at its manufacturing sites after a door blew off an Alaska Airlines Boeing 737 Max 9 jet in mid-air in January.

Ryanair said there remains "a risk that Boeing deliveries could slip further" which would hamper passenger growth, but the group is "working closely" with Boeing to improve quality and accelerate deliveries.

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“The final outcome for the...financial year will be heavily dependent upon avoiding adverse events during the 2025 financial year, such as wars in Ukraine and the Middle East, extensive air traffic control disruptions or further Boeing delivery delays,” Mr O’Leary said.

Third Bridge analyst Olly Anibaba said the delivery delays will be a "huge problem" for Ryanair.

"Third Bridge experts expect Ryanair to receive only half of what was promised, potentially reducing passenger volumes by 5 to 10 million," he said. "Ryanair can offset some of the impact on profits by removing the worst-performing routes from their network."

Despite these issues and expectations of weaker pricing power Ryanair said it plans to buy back nearly £600m of its own shares, citing the need to use its "surplus cash".  

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“The firm has been a little cagey in terms of affirming forward guidance amid lingering potential issues such as aircraft supply and macroeconomic pressure," said Adam Vettese of investment platform eToro.

"Despite this, a chunky share buyback of €700m has been announced which could well be a catalyst to see shares start to creep back up towards the record high level achieved earlier this year.”

Ryanair also announced that former UK home secretary Amber Rudd will join its board of directors as a non-executive from July 1.

Ms Rudd was energy and climate change secretary under David Cameron and then served as home secretary for nearly two years under Theresa May, before resigning in 2018 in relation to the scandal over the mistreatment of the Windrush generation of migrants to the UK. She did not seek re-election in 2019 and has since been working for public relations companies.