Ryanair has indicated that summer fares are likely to drop significantly compared to last year, following a nearly 50% decrease in the airline’s profits.

The budget carrier attributed the slump to more cautious spending by passengers and the impact of the Easter holiday schedule, noting that income for the period between April and June fell to €401m (£338m) compared to the previous year.

Passenger fares saw an average 15% decline during this time, with Ryanair warning that further fare reductions will likely be necessary to attract more travelers in the coming months.

“Ticket prices are now significantly lower than they were last year, and the pressure on pricing… continues to intensify,” said CEO Michael O’Leary during a presentation on the company's latest financial results.

Shares in Ryanair and other aviation businesses experienced sharp drops, as industry experts raised concerns that tightening customer budgets could weigh heavily on the sector’s performance during the peak summer season.

Ryanair has revised its outlook for summer fares, predicting prices between July and September to fall "significantly" rather than remaining "stable or slightly higher" as previously forecast.

In June, the average ticket price was €41.93, a drop from the €49.07 seen the previous year.

Neil Sorahan, the airline's Chief Financial Officer, commented that travelers appear to be exercising more financial restraint and spending with caution.

He further noted that after two years of strong travel demand, "there seems to be some resistance" from consumers now.

Despite the profit decline, Ryanair saw a modest rise in passenger numbers, which helped keep the overall revenue drop to just 1%.

However, the weaker financial results may signal the end of an intense post-pandemic rise in ticket prices, with other airlines also warning of declining revenues due to lower demand.

Ryanair highlighted that its summer performance is now “heavily reliant” on securing more last-minute bookings, particularly during August and September.

Customers are reportedly delaying their vacation plans, a trend believed to be driven by ongoing financial strain from the cost-of-living crisis.

Earlier this month, Jet2 mentioned only "mild" fare increases would be observed as a consequence of a surge in late holiday bookings for its European destinations.

Lufthansa also acknowledged emerging “negative market trends,” while Air France-KLM anticipated an economic hit due to underwhelming bookings for the upcoming Paris Olympic Games.

As of Monday morning on the London Stock Exchange, Ryanair’s stock dropped 12.5%, with competitors such as EasyJet down 6.51% and Wizz Air declining 6.56%.