Ryanair has reported weaker profits than expected for its first financial quarter, blaming a need to “stimulate” flight sales amid heightened consumer caution.

Europe’s largest carrier by passenger numbers said it had engaged in more discounting than expected in the three months to the end of June, with the average fare 15% down, and it saw no end in sight to the need for markdowns.

Profit after tax came in 46% lower at €360m (£303m).

Market analysts had expected a figure above €530m.

The no-frills carrier reported revenue per passenger was 10% down as a whole, with so-called ancillary revenue – that is sales covering additions such as hold luggage – flat.

Operating costs also dragged.

Ryanair reported an 11% rise as higher wages offset lower fuel bills.

Group chief executive Michael O’Leary warned shareholders that fares over the key summer holiday months would be significantly down as a result of the weaker than anticipated consumer backdrop.

He indicated that prices were continuing to decline.

Mr O’Leary told shareholders: “While Q2 demand is strong, pricing remains softer than we expected, and we now expect Q2 fares to be materially lower than last summer [previously expected to be flat to modestly up]”.

He said it was too early to forecast profit for the full financial year, which ends on 31 March 2025, due to the weakening backdrop for flight prices.

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