(Bloomberg) -- Ryanair Holdings Plc lowered its fare outlook for the September quarter, in the latest sign that demand for air travel is softening.
Ticket prices could fall as much as 10% in the fiscal second quarter, though will likely decline in the range of 5-9% from the year-ago period, Chief Executive Officer Michael O’Leary said. The company previously had estimated average fares would drop by about 5%.
Ryanair shares fell as much as 4.9% as the airline hosted its annual general meeting in Dublin. They recovered most of the drop after O’Leary, who initially referenced the remainder of this year, clarified the time frame for his outlook.
Consumer spending remains constrained as a post-pandemic boom in travel starts to level off. The Irish discounter had already cut its pricing outlook in July for for crucial summer season, saying fares would be “materially lower” as fliers grew more cautious. The company followed up last month by saying it expected the weakness to extend into winter.
O’Leary said he doesn’t expect second-quarter yields to decline into the double-digits. He added that he has “no visibility” for the third quarter.
Yield is a measure of revenue per passenger with the distance flown factored in. Revenue can include ticket prices as well as add-ons such as seat selection and baggage fees.
As long as Ryanair continues to deliver its services and remains disciplined on cost, “the market will work it out eventually in time,” O’Leary said at the meeting.
The shares fell 1% as of 12:59 p.m. in Dublin. They’ve declined 18% this year.
(Updates with more detail on second-quarter fares. An earlier version of this story was corrected because O’Leary originally referred to fares through the rest of this year.)
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