Ryanair on Monday struck a cautious tone about travel demand for the rest of the year and cut its passenger growth forecast due to Boeing delivery delays after its quarterly profit shot past pre-pandemic levels.

Ryanair, which flew a record number of monthly passengers both in May and June, said demand looked robust for the rest of the summer with fares expected to keep growing but at a slower 10-15% rate from July to September.

Fares for passengers booking close to their departure dates softened in late June and early July and CEO Michael O’Leary said the low cost carrier might have to stimulate demand through lower prices this winter when it will have 25% more seats to fill than in 2019.

Ryanair shares, up 26% so far this year, were 3.2% lower at 15.90 euros at 1020 GMT.

“We’re concerned about the impact of these macroeconomic trends. Consumer price inflation, higher interest rates, higher mortgage rates might affect consumer spending in the second half of the year,” O’Leary told an analyst presentation.

He said that would ultimately be good for Ryanair’s growth because customers will keep flying but become more price-sensitive.

The Irish airline, Europe’s largest by passenger numbers, posted a 663 million euro ($737.26 million) after-tax profit for the three months ending in June after traffic rose by 11% year-on-year and average fares jumped by 42%.

That compared to 170 million euros a year ago when the travel rebound began and beat the previous high for the first quarter of its fiscal year, 397 million euros in 2017. A company poll of analysts had expected a 620 million euro profit.

Ryanair said it remained cautiously optimistic about modestly increasing full-year profit.

It now expects traffic in the year to March 2024 to grow by 9%, to around 183.5 million passengers compared to 185 million originally expected, citing Boeing delivery delays.

Some new aircraft deliveries will be delayed from April 2024 to June 2024, O’Leary said, adding that Ryanair was working closely with Boeing and Spirit AeroSystems to ensure no further delays beyond that.

Chief Financial Officer Neil Sorahan told Reuters he was not as concerned about the delays as he was a few months ago, that Boeing had improved significantly and deliveries were more recently hit by factors outside the planemaker’s control.

Ryanair said customers were not shifting to booking trips to cooler climates or cancelling flights due to the heatwave in Europe, echoing comments from rival easyJet, which also reported record figures for the period last week.

“Are we seeing any changes in demand patterns? No. In fact, if anything over the last two or three weeks we’ve seen stronger demand ex-Ireland, ex-UK, of people trying to get the hell away from the unseasonably high rainfall we’ve had,” O’Leary told an analyst call.

“If anything, it gives me even more confidence for sustained growth in Mediterranean holidays over the next decade.”

Source: Reuters.com