Ryanair boss Michael O’Leary said the era of ultra-low fares is over and warned that ticket prices will have to increase due to rising fuel costs as a result of Russia’s invasion of Ukraine.
"There's no doubt that at the lower end of the marketplace, our really cheap promotional fares - the one euro fares, the €0.99 fares, even the €9.99 fares - I think you will not see those fares for the next number of years," O'Leary told BBC Radio 4's Today program.
“We think that €40 needs to edge up towards maybe €50 over the next five years. So, the £35 average fare in the UK will rise to maybe £42 or £43,” he added.
The Irish low-cost carrier is known for its ultra-low-cost ticket sales. But according to O’Leary, ultra-low fares prove to be unsustainable during this period marred with geopolitical tensions, supply chain issues, and volatile oil prices as well as potential COVID-19 outbreaks.
O'Leary's comments were made shortly after the budget carrier announced its financial results for the first quarter of FY2023.
During the quarter, Ryanair returned to profitability but warned of the “fragile” state of the air travel market and the risk of potential new COVID-19 variants in the autumn.
In Q1 FY2023, Ryanair posted a profit after tax (PAT) of €170 million, an increase compared to a loss of €273 million in Q1 FY2022. The positive financial results were attributed to strong air travel demand.