Ryanair stock pops, CEO says fare declines not as bad as feared

Shares of low-cost airline Ryanair (RYAAY, RYA.IR) are jumping after CEO Michael O'Leary indicated that the decline in summer airfares wouldn't be as sharp as they thought. O'Leary told Reuters that he thinks fare weakness has "leveled out," with decreases of about 5%, not the 10% that had been initially feared.

Morning Brief anchors Brad Smith and Madison Mills discuss the comments in the video above.

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This post was written by Stephanie Mikulich.

Video transcript

Ryanair shares popping in pre market as the discount airline CEO tells Reuters that the downward trend in average fares during the summer has levelled out, shares are up by about 7% here.

And this is, uh, airline operator that's well known for really going after flyers that are booking last minute trips.

Uh, especially in Europe and looking across where they can essentially kind of not even just nickel and dime, but have some prices that are more advantageous to the airline itself than to consumers that are booking last minute.

And consumers were pushing back on that which was directly impacting this company.

So it's not totally out of the woods just yet because there are still consumers that are pushing back on these prices.

But they're saying the worst might be behind them.

And it's something that is not just coming from the mouths of these companies and the consumers.

We're seeing it in the pricing data.

When you look at inflation data coming from the likes of the Consumer Price Index, we have been seen a consistent decline in inflationary pressure on airline prices.

Specifically, having said that, though the CEO didn't know a couple of things that may be a company specific to Ryan Air here is saying that four year, 2025 passengers could be shy of 200 million.

With that 5% fares lower to start the year.

As you mentioned Brad, but really going strong against Boeing and some of the commentary saying quote, he doesn't have a lot of confidence.

He also has not spoken to Boeing's new CEO and has again been very outspoken about the delays in 737 in particular and air traffic control issues as well, which is, uh, personally impacted so many of us over the past couple of years, as there have been staffing issues on that side of things, so citing some of those broader headwinds as company related pressures as well there.