Ryanair, Europe’s largest low-cost airline, has announced plans to increase airfares in 2025 after reporting a 16% drop in annual profits for the 2024-2025 fiscal year.
The decision comes as the airline grapples with rising operational costs and softer demand, which have squeezed margins despite a record-breaking 200 million passengers carried.
This article explores the reasons behind the fare hikes, their potential impact on travellers, and what lies ahead for Ryanair in a competitive market.
Why Are Ryanair’s Profits Down?
Ryanair’s profits after tax fell to €1.61 billion from €1.92 billion the previous year, according to financial reports released in May 2025.
The primary culprit was reportedly a 7% drop in average ticket prices, driven by weaker demand and a dispute with online travel agents, which limited booking visibility.
While revenue grew by 4% to €13.92 billion, operational costs surged by 9%, fuelled by higher fuel prices, staff salaries, and maintenance expenses.
These rising costs, combined with lower fares, have put pressure on Ryanair’s bottom line, prompting the airline to rethink its pricing strategy.
Ryanair CEO Michael O’Leary, known for his candid approach, highlighted the need to recover lost ground. He noted that the fare reductions in 2024 were unsustainable, especially as competitors face capacity constraints.
European short-haul capacity has been tightened due to Airbus A320 groundings for engine repairs and delays in Boeing deliveries. Ryanair sees an opportunity to boost fares without losing market share.
Fare Hikes on the Horizon
Ryanair’s response is clear: airfares are set to rise. For the peak summer season of 2025, O’Leary projects a 5-6% increase in ticket prices compared to 2024.
The first quarter is already showing signs of recovery, with fares expected to jump by a “mid-to-high teen percent,” driven by strong Easter bookings, which saw a 15% price surge. These increases aim to offset the 7% fare drop from the previous year and capitalize on robust summer demand.
Travelers may feel the pinch, especially budget-conscious ones who rely on Ryanair’s low-cost model. However, O’Leary remains optimistic, citing constrained supply in Europe’s airline market as a tailwind.
Fewer available seats from competitors mean Ryanair can charge more while maintaining its competitive edge. But the risks still loom large for the budget airline. Potential tariff wars, macroeconomic shocks, or geopolitical conflicts could dampen demand and disrupt pricing plans.
What Does This Mean for Travelers?
For passengers, higher fares could mean rethinking travel plans. Ryanair’s ultra-low-cost model has long attracted cost-sensitive travellers, but a 5-6% hike, or even more during peak periods, might push some to explore alternatives.
Some are questioning whether Ryanair’s fare increases will erode loyalty in a market where competitors like easyJet and Wizz Air are also vying for passengers.
Others argue that Ryanair’s extensive route network and reliability will keep it a top choice, even at slightly higher prices.
Future Outlook
Looking ahead, Ryanair aims to grow passenger numbers to 210 million in 2025-2026 while boosting profits through higher fares.
The airline’s ability to navigate rising costs and capacity constraints will be critical. O’Leary’s strategy hinges on balancing affordability with profitability, ensuring Ryanair remains Europe’s go-to budget carrier.
For travellers planning summer trips, booking early could help mitigate fare increases. Visit Ryanair’s official site for the latest pricing updates, and stay informed about market trends that might affect your travel budget.
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