Europe aviation pricing: Ryanair lowers fare outlook, but inflation persists

When Ryanair Group Chief Executive Michael O'Leary said that the airline's summer fares would not increase as much as previously expected, airline share prices fell.

Nevertheless, Ryanair's new expectation of a low single digit percentage increase just brought the ultra-LCC more in line with other LCCs' commentary on the outlook for yields this northern summer.

Official data for passenger air travel price inflation show that EU fare increases have settled in the single digits for many months, after an extended period of double digits in the initial post-pandemic recovery. UK air fare inflation turned negative in Mar-2024, which is the most recent month for which figures are available.

Nevertheless, prices in the UK in Mar-2024 were still 57% higher than they had been in Mar-2019. In the EU they were 45% higher.

Given the strength of these increases, a more consistent weakening seems likely at some point. However, with supply chain-induced capacity constraints enduring, it is still too early to call the end of positive inflation rates for air travel in Europe.