Ryanair Holdings PLC (LSE:RYA) boss Michael O'Leary said a "recessionary feel" in Europe was a possible reason for the softer growth in air fares in recent weeks.
This morning's results again flagged that the strong price rises seen last year were easing off, which followed O'Leary's update from two weeks ago, where he said summer fares were not likely to see the 5% to 10% rise that he had initially expected last month.
"It is a bit surprising that pricing hasn't been stronger and we're not quite sure whether that's just consumer sentiment or recessionary feel around Europe but we still see peak travel demand certainly through July and August being strong," O'Leary said in his presentation to analysts and the media alongside results.
"And if we have to discount or cut fares to fill to 94% load factor in April, May and June then so be it."
Financial chief Neil Sorahan also told Reuters the airline had to reduce fares in particular for mid-week flights in recent weeks to boost demand.
These reduced prices may continue into June, Sorahan said, but prices are expected to pick up again for the school holidays.
He also told the newswire that Boeing was delivering planes with "a bit more consistency" now
Ryanair also announced a 700-million-euro share buyback, its first since the COVID-19 crisis and the same amount as the airline's last major buyback in 2019.
Shares in the Dublin-headquartered carrier fell 1.3% despite profits being higher than the market forecast.
"While the buyback is good news and shows confidence, and while FY24 is broadly in-line with most parts of FY25 guide as expected, we fear the further softening of pricing commentary may win the day," analysts at Deutsche Bank wrote in a note.
Analyst at Third Bridge said industry experts believe "airlines are consciously not prioritising load factor to keep fares slightly higher", with Ryanair slightly underperformed its 92-93% load factor target for the winter.
"The Boeing delivery delays will be a huge problem for Ryanair," they added, with Ryanair expected to receive only half of what was promised, potentially reducing passenger volumes by 5-10 million.
"Ryanair can offset some of the impact on profits by removing the worst-performing routes from their network."