Ryanair forced to slash ticket prices as profits nosedive by almost half amid soaring air fares
PROFITS at Ryanair nosedived by almost half in the last three months as passengers baulked at soaring air fares.
Europe’s biggest airline spooked the travel sector yesterday by revealing falling sales had forced it to slash ticket prices by 15 per cent compared to last year — meaning profits fell 46 per cent to £303million for the last quarter.
Holidaymakers hope the slip is a sign airlines might ease off ratcheting up fares.
They rocketed by more than a quarter after the pandemic as airlines tried to recover from their Covid losses.
However, airline investors will be shocked by Ryanair’s weakness after months of being told that cash-squeezed consumers were still putting holidays at the top of their budget priorities.
Chief executive Michael O’Leary said that the budget airline had to discount fares heavily — explaining the carrier needed to use “more price stimulation than we had previously expected”.
He suggested that there was little sign of that changing and added: “The trend is downwards and weaker.”
Ryanair told analysts that in recent weeks when it removed lower fares for last-minute tickets, the remaining higher-priced tickets failed to sell.
So the carrier had to resort to big promotions to fill seats.
Shares in Ryanair slumped by 14 per cent as markets opened while rivals easyJet, Wizz Air, and British Airways parent IAG were all dragged lower by the warning.
The travel industry is concerned that there is growing pressure on yields — the measure of average fare paid per mile by each passenger — at a time when airlines are having to pay extra costs for more sustainable greener fuels.
The warning came on the first day of the aviation industry’s Farnborough Airshow, where plane bosses are already concerned about supply chain snags caused by Boeing’s safety failures.
Ryanair exclusively uses Boeing planes and Mr O’Leary said there were still delays to new plane orders.
He said he had concerns about if planes due to arrive next year would do so on time.
Rocky Horror picture sale
IT’S astounding… media giant Amazon has swooped on the British film studio where cult classics The Rocky Horror Picture Show starring Tim Curry and Susan Sarandon and the movie Dracula were filmed.
The online company’s video streaming division has bought Bray Film Studios in Berkshire, which includes five stages, workshops and car park lots.
The film studios has already collaborated with Amazon Prime Video filming its series The Lord of the Rings: the Rings of Power.
And after the deal completes it will film the second series of Citadel — starring Priyanka Chopra Jonas, 42, and Richard Madden, 38 — at Bray Studios.
Amazon has been bulking up its film and TV production to make its Prime Video subscription more appealing.
It had already spent £6.6billion on Hollywood’s MGM Studio in 2022 to expand the catalogue of films for its Prime members.
Carpet burn over jobs pain
THE majority of Carpetright stores and jobs will be lost despite a rescue attempt by the bust retailer’s arch rival.
Tapi Carpets yesterday said it was finalising a deal with administrators PWC to save 54 shops and 300 jobs.
However, there will still be around 1,000 job losses and 220 store closures as it is only buying parts of the business.
It comes after The Sun was the first to report Tapi was frontrunner to acquire some of the sites.
Tapi was set up by Martin Harris, son of Carpetright’s founder Lord Harris of Peckham, and its arrival as a direct competitor made life much harder for Carpetright.
Tapi said it had tried to save all of the business but found it was “unviable” and had been “materially loss-making” for a number of years while it had “significant debt” on its balance sheet.”
Kevin Barrett, the boss of Carpetright’s owner Nestware Holdings, said that it had tried to raise fresh funds to save the business.
He said of the deal with Tapi: “We have tried everything to turn Carpetright around and I’m truly sorry that we were unable to save more jobs.”
999 fails £17m rap
BT has been fined £17.5million for its “catastrophic” handling of 999 calls last summer.
Watchdog OFCOM yesterday said that BT’s network disruption had affected 14,000 emergency calls and lasted 10.5 hours in June 2023.
The regulator said there had been a software glitch in the system made worse by “human error” when trying to switch to a disaster recovery plan.
Ofcom said: “BT fell woefully short of its responsibilities.”
TV float boost to London
THE London Stock Exchange has had a much-needed boost from a French media giant choosing the UK to float its TV business.
Vivendi yesterday said that it would spin-off its Canal+ division on the LSE as the broadcaster pushes overseas.
Vivendi said that a “London-based listing would represent an attractive solution for international investors”.
Canal+ will still be registered in France and will not need shareholder votes to proceed with takeovers.
Mark Austin, partner at legal firm Latham & Watkins, said: “This is great news on the back of the FCA’s reformed listing regime. The regime is now match fit again and that is being recognised by issuers and investors.”
London listings almost halved last year as more companies opted for bigger valuations in the US, prompting much angst about the reputation of the exchange.