BUDGET airline Ryanair has said its profits after tax dipped sharply by almost half in its first quarter, between April and June, as cost-conscious passengers reined in their spending. The Dublin-listed carrier also pointed to the timing of Easter as contributing to the disappointing performance.

Ryanair, famously a no-frills airline, reported profits of €360 million (£303 million) in the quarter, 46% lower than the same period last year, despite passenger numbers rising 10% to 55.5 million and missing analysts’ expectations.

The group’s earnings fell to €401m (£338m) in the three months to June 30 compared with the same period last year and the results drove the share price down 12.5% in early trading on Monday.

Ryanair, Europe’s largest airline, cautioned that fares this summer would be “materially lower” than last year as it offers further discounting to entice passengers who are coping with rising inflation and the cost of living crisis. The average fare in the first quarter fell 15% to €42 (£35) year on year.

The group’s chief executive Michael O’Leary said the airline is operating its largest-ever schedule this summer with over 200 new routes and five new bases “as we deliver as much low fare growth as possible for our passengers and airport partners in FY25”.

Mr O’Leary took aim at air traffic controllers across Europe, stating: “In the last 10 days of June, we suffered a significant deterioration in European ATC capacity which caused multiple flight delays and cancellations, especially on first wave morning flights.”

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Describing Europe’s ATC services as “hopelessly inefficient”, the outspoken CEO said: “It is more urgent than ever that the new EU Commission and Parliament deliver long-delayed reform of Europe’s hopelessly inefficient ATC services.

“This can be achieved by proper staffing of Europe’s ATC services and protecting overflights (during national strikes) which would deliver revolutionary environmental improvements in EU air travel.”

Looking ahead to FY25, Mr O’Leary said he expected traffic to grow 8%, from 198 million to 200 million passengers, subject to no worsening Boeing delivery delays. In his statement, he said the group would receive 20 fewer Boeing Max aircraft than scheduled for its peak summer season, down from a backlog of 23 forecast in May.

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However, he noted “an improvement in the quality and frequency of deliveries” from Boeing in recent months. The Ryanair group had 156 B737 Gamechanger aircraft on June 30 and expects to increase this to over 160 by the end of July – 20 short of its contracted summer 2024 deliveries.

Mr O’Leary added: “While there remains a risk that Boeing deliveries could slip further, our focus has now turned to ensuring timely delivery of our remaining 50 Gamechangers ahead of summer 2025.

“As previously guided, we expect unit costs to rise modestly this year as ex-fuel costs (including pay and productivity increases, higher handling and ATC fees and the impact of multiple B737 delivery delays) are substantially offset by our fuel hedge savings and rising net interest income, which widen Ryanair’s cost advantage over its competitors.”

Pointing to strong quarter two demand, he cautioned: “Pricing remains softer than we expected, and we now expect Q2 fares to be materially lower than last summer (previously expected to be flat to modestly up).”

However, he refused to predict final first half performance, say it was “totally dependent” on last-minute bookings, particularly in August and September, which aligns with the ongoing effects of the cost of living crisis.

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“As is normal at this time of year, we have almost zero Q3 and Q4 visibility, although Q4 will not benefit from last year’s early Easter,” Ryanair noted. “It is too early to provide meaningful FY25 profit after tax guidance, although we hope to be able to do so at our H1 results in November.

“Final FY25 outcome remains subject to avoiding adverse developments during the period, especially given continuing conflicts in Ukraine and the Middle East, repeated ATC short staffing and capacity restrictions, or further Boeing delivery delays.”

Shares in Ryanair have fallen 24% since April, partly due to fare weakness.