RYAAY Share Price: Ryanair Holdings PLC (LSE) reported an 18% drop in half-year profits due to rising costs, Boeing delivery delays, and lower ticket prices. Despite achieving record passenger numbers, the airline’s costs surged by 8% to €6.68 billion, squeezing its profits down to €2.18 billion for the period ending September 2024.

Revenue saw a slight increase of 1%, reaching €8.69 billion as Ryanair transported 115 million passengers, a 9% rise compared to the previous year.

CEO Michael O’Leary attributed the decline in profits to a mix of external and market factors, including reduced consumer spending, a late Easter holiday, and diminished bookings through online travel agencies (OTAs). To stimulate demand, Ryanair implemented more aggressive pricing promotions, impacting revenue growth. The delay in Boeing aircraft deliveries also inflated costs, leading the airline to revise its passenger forecast for 2026 down to 210 million from a previous estimate of 215 million. This year, Ryanair now expects to carry between 198 million and 200 million passengers.

In terms of costs, O’Leary noted that fuel hedging and compensation from Boeing helped to offset increased labor costs and higher air duty. However, the airline remains cautious about fare expectations. Although the decline in fares has slowed, Ryanair anticipates a further drop in average fares in the third quarter, continuing the year-over-year downward trend.

Due to ongoing uncertainties, including geopolitical tensions in Ukraine and the Middle East, air traffic control (ATC) staffing issues, and Boeing’s production delays, Ryanair has withheld its full-year profit guidance. The airline cited “zero visibility” for the final quarter and an interim dividend of €0.223 for shareholders.

Ryanair’s stock (RYA) remains in focus as investors monitor the airline’s response to these headwinds.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.