Ryanair sees sales shortfall as online travel agents cut flights

Ryanair Holdings Plc’s victory in removing flights from online travel agents’ websites will cost the airline ticket sales in the short term.

Aggregators such as Booking.com, Kayak and Kiwi abruptly stopped selling Ryanair flights on their platforms in December, the Irish low-cost airline said in a statement on Wednesday.

The move is set to reduce short-term load factors, or the ratio of occupied seats on a plane, by up to 2% in December and January, Ryanair said. Prices are also set to soften as Ryanair lowers fares to encourage passengers to book directly through the airline, it said.

The budget carrier’s announcement is the latest in a long running feud over third parties’ ability to sell seats on Ryanair flights. Online travel agents have accused Ryanair of abusing its market dominance by disrupting their services. The airline, meanwhile, says the travel agents overcharge for flights and has encouraged passengers to book directly through the airline.

Ryanair said it didn’t expect the removal of flights to “materially affect” full-year traffic volumes or profit-after-tax guidance as they account for a small portion of the airline’s bookings. Ryanair previously guided that its full-year profit will be in a range of €1.85 billion ($2 billion) to €2.05 billion.

Shares of Ryanair fell 4.3% on Wednesday after warning of the shortfall. They advanced 56% last year.

Load factor is an important measurement for airlines because it makes a difference in a flight’s profitability. Ryanair said in the statement that load factors in December averaged 91% of available seats, compared with 92% at the same time in 2022.

Ryanair’s reduced load factor along with Wizz Air Holding Plc’s limited capacity due to engine issues could lead to a softer revenue environment, Stephen Furlong and Eleanor Walsh, analysts at Davy, said in a note.

The move by the online travel agents was unclear but it could be attributed to pressure from Consumer Protection Agencies, the Irish High Court ruling against Flightbox or Ryanair’s own customer initiatives, according to the airline.

Ryanair has been involved in litigation with various online travel agencies, including On The Beach Group Plc, which sued the airline in 2021 over accusations it was monopolizing the market for booking services and not giving customers a free and fair choice. A ruling in October ordered Ryanair to pay more than £2 million ($2.5 million) to holiday service providers over canceled flights during the pandemic.