Ryanair boss Michael O’Leary warns of holiday fares

Ryanair chief executive Michael O’Leary has warned flight prices could rise by almost 10% this summer due to rising demand for European holidays.

Holidaymakers should brace for peak-season prices to rise by a “high single-digit percentage” as demand for breaks at European beach resorts recovers thanks to the lifting of pandemic travel restrictions.

The low-cost airline’s chief executive also said there are likely to be ongoing delays at airports, blaming staff shortages.

Mr O’Leary said there were “shortages” at Heathrow and Manchester in particular, where he claimed “too many people” had been made redundant.

He added he hoped the worst of the delays would ease in time for the busy summer season but stressed it would still be a “challenge” for passengers passing through UK airports.

The comments came as Ryanair reported annual underlying losses narrowed to €355m (£302m) and said it hoped to return to “reasonable profitability” in the current financial year.

However, it warned that despite a rebound in passengers and bookings, the recovery “remains fragile”.

Mr O’Leary’s comments mark the latest price warning ahead of the peak season, after holiday giant Tui announced last week it would not be offering last-minute cut-price deals this summer due to a rebound in customer demand.

Ryanair signaled that prices would rise in the industry over the next few months as European flight programs across the sector were cut by around 15% over the summer.

He told BBC Radio 4’s Today Programme: “For the September quarter, based on around 50% of all bookings, we currently expect prices to increase by a high single digit percentage.

“It seems to us that this peak summer season there will be higher prices because there is so much demand for Europe’s beaches and these price increases will continue.”

The group said its peak fares for this summer could be higher than they were before the pandemic.

The group’s loss for the year ended March 31 was lower than expected, narrowing from losses of 1.02 billion euros (£867 million) a year earlier when trading was severely impacted by the pandemic.

Demand rebounded sharply as it carried 97.1 million passengers thanks to the lifting of pandemic restrictions, up from just 27.5 million a year earlier.

The group hopes to boost that number further to 165m passengers this year – ahead of the record pre-Covid 149m level – but said it had yet to cut fares in the first quarter to secure bookings amid ongoing uncertainty.

Mr O’Leary said it was “impractical, if not impossible” to give an earnings forecast for 2022-23 given the risk of holiday bookings from Covid and the Ukraine war.

He revealed that news of Russia’s invasion of Ukraine cost around a million bookings in late February and early March.

The airline also warned of rising fuel costs due to rising oil prices amid the Ukraine war.

With one-fifth of anticipated fuel needs not secured in advance, “this will result in some unplanned cost increases,” the group said.