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Ryanair to expect fares to rebound after profit drop due interest rates

Ryanair announced on Monday that demand was robust across Europe, and that it expected fares to rebound. This would allow the airline to recover much of its losses from last year as consumers struggled against high interest rates.

The largest low-cost carrier in Europe reported a 16% drop in profit for the 12 months ended March 31. A softer demand from consumers and a dispute between online travel agents led to a 7% decrease in fares.

In an interview, Chief Financial Officer Neil Sorahan said that demand is strong across the entire network. "We operate into 37 different countries. "We're seeing strong summer demand everywhere."

We're thrilled that we will be recovering the majority of this 7% in fare drops, but not all of them. "I think that this is a pretty good turnaround."

According to a poll conducted by the company, analysts estimated that Ryanair's after-tax profit was 1.61 billion euro ($1.8 billion).

Ryanair has said that fares are expected to increase by "mid-to high-teen percent" on an annual basis for the three-month period ending in June, due largely to the timing of Easter.

In a video, Michael O'Leary, the Chief Executive of the company said that summer bookings were around 1% higher than they had been during the same period in 2013.

Ryanair has flown a record-breaking 200 million passengers in the past 12 months, after reducing an earlier target of 205 million due to delays with Boeing. It is expected to fly 206 millions passengers by March 31, 2026.

Sorahan stated that "we're in good condition on deliveries."

The airline's shares, Europe’s largest airline based on passenger numbers, closed Friday at 22.41 euro, a strong recovery from the 12-month low reached in July last year of 13.41 euro, following a 15% drop in average fares during the first quarter.

(source: Reuters)