Ryanair cautious on first-quarter demand after strong Christmas

Bloomberg

Ryanair Holdings Plc Chief Executive Officer Michael O’Leary struck a cautious note on bookings in the first quarter, when factors like inflation, economic contraction and higher energy prices may prompt travellers
to curtail spending following strong Christmas demand.
“We expect it to be a little bit softer in the first quarter of next year, but then we think next summer is going to be very strong,” O’Leary told reporters in Dublin. “Recession will be good for our growth but it will put pressure on our pricing.”
While there’s no expectation that bookings will dry up, and an anticipated slide in autumn sales failed to materialise, a dip seems likely in coming months as higher household bills begin to impact consumer spending, he said. Ryanair is currently 15% booked for the March quarter, compared with the usual 20%.
The comments from the CEO of Europe’s largest discount
carrier underscore how even budget specialists like Ryanair or EasyJet Plc aren’t entirely immune to consumer concerns about the rising cost of living.
While an economic slump tends to favour companies that provide rock-bottom pricing, there is growing evidence that some travellers are rethinking their plans by booking shorter trips — both in duration and travel time — or seeking out cheaper locations.
Encouraging trends include strong bookings for ski breaks and outbound leisure traffic from the UK amid a continuation of so-called revenge tourism as people make up for vacations lost during the Covid pandemic, O’Leary said. At the same time, the Easter holiday falls outside the first three months of 2023 and into Ryanair’s next fiscal year, which will weaken traffic for the quarter.