Irish low-cost carrier Ryanair Holdings Plc (GB:0A2U) (NASDAQ:RYAAY) is lowering the fares for some of the flights to combat the delisting of its flights by certain online travel agents (OTAs). OTAs, including Booking.com, which is owned by Booking Holdings (NASDAQ:BKNG), Kiwi, and Kayak, stopped selling Ryanair flight tickets on their portals in December without a warning. This affected the carrier’s load factor by 1% to 2% in December and January and softened short-term yields. Ryanair shares fell over 4% yesterday following the news.
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Load factor, defined as the ratio of occupied seats on a plane, is an important metric for air carriers since it represents the carrier’s profitability. The airline seems unaffected by the OTAs’ move since it believes that these “pirate” OTAs overcharged customers with hidden costs on checkouts. The Irish carrier has welcomed all passengers to book tickets directly from its official website, “where they are guaranteed to always get the lowest airfares without OTA Pirate overcharges, fake contact info, or other pricing/refund scams.” In December, the airline took steps such as giving a 10% discount on flight tickets for travel between January and March.
Ryanair’s Recent Performance
Further, Ryanair said that the removal of its flight sales from the OTAs will not have a material impact on its full-year 2024 traffic or profit after tax (PAT) guidance. These OTA bookings reflect only a small percentage of Ryanair’s flight sales, it added. However, the company did mention that the OTA delisting led to a 1% drop in load factor in December to 91%, while traffic grew by 9% to reach 12.54 million passengers. Moreover, Ryanair operated over 72,500 flights in December, while 900 flights were canceled due to the ongoing situation in Gaza.
The reason for the sudden delisting by OTAs is unknown, but Ryanair believes it could be due to the ongoing litigation with various OTAs as well as pressure from Consumer Protection Agencies, the Irish High Court Ruling against Flightbox, or its own measures to attract customers to Ryanair.com.
Are Ryanair Shares a Good Buy?
Yesterday, Evercore ISI analyst Duane Pfennigwerth downgraded 0A2U stock to a Hold rating from Buy. The analyst has a price target of $140 on the stock, implying 7.4% upside potential from current levels.
Overall, with two Buys and one Hold rating, 0A2U stock has a Moderate Buy consensus rating on TipRanks. The Ryanair Holdings Plc share price forecast of $136.50 implies 4.8% upside potential from current levels. 0A2U shares have gained 70.6% in the past year.
