Europe’s largest airline by passenger numbers revealed it had engaged in more discounting than anticipated during the three months ending in June, resulting in an average fare decrease of 15%, with no end in sight for the need for markdowns.

Profit after tax dropped by 46% to €360m (£303m), significantly below market analysts’ expectations of over €530m.

The no-frills carrier reported a 10% decline in revenue per passenger overall, with ancillary revenue (including additions such as hold luggage) remaining flat. Operating costs rose by 11%, driven by higher wages despite lower fuel expenses.

Group Chief Executive Michael O’Leary warned shareholders that fares during the crucial summer holiday months would be considerably lower due to weaker than anticipated consumer demand, indicating that prices continue to decline.

Mr. O’Leary stated, “While Q2 demand is strong, 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].”

He noted it was too early to forecast profit for the full financial year ending 31 March 2025, given the weakening backdrop for flight prices.

Ryanair also said it has yet to assess the cost of the disruption caused by Friday’s global IT meltdown, which heavily impacted aviation, forcing the cancellation of thousands of flights worldwide. Disruption continued into the weekend as crews and planes were out of position.

Additionally, Ryanair has been dealing with strikes by air traffic controllers in France, further straining operations.

Despite these challenges, Ryanair is running a record summer programme. However, Boeing’s delays in delivering 737 MAX 8 aircraft, crucial for the airline’s efficiency improvements, have hindered growth. Ryanair expects to be 20 aircraft short of contracted deliveries by the end of the month due to Boeing’s production constraints related to quality concerns.