It may have attracted 10% more passengers, but economic headwinds appear to have helped knock budget airline Ryanair off course as it announces a 46% drop in profits in today's first-quarter 2024 results.

Europe's largest airline said its profits nosedived by almost half between April and June and it has warned that fares this summer will be "materially lower" than in the previous year's operations.

Michael O'Leary, Ryanair CEO, has told investors that customers are proving "resistant" to any attempts by the airline to increase ticket prices, while we may also see a 5% drop in fare prices in the coming quarter.

Challenges include ongoing Air Traffic Control issues, says the airline. 

The report told investors: "In the last 10 days of June, we suffered a significant deterioration in European ATC capacity which caused multiple flight delays and cancellations, especially on first wave morning flights, making it more urgent than ever that the new EU Commission and Parliament deliver long delayed reform of Europe's hopelessly inefficient ATC services.

"This can be achieved by properly staffing of Europe's ATC services and protecting overflights (during national strikes) which would deliver revolutionary environmental improvements in EU air travel."

The airline, which employs more than 25,000 people globally from 70 nations, also took the reporting opportunty to take a swipe at EU clear air regulation, stating that recently proposed EU legislation "confining the monitoring of aviation's non-CO2 impact to only intra-EU flights (yet again exempting long haul flights, which account for the majority of EU aviation emissions) is indefensible and undermines the EU's green agenda and credibility."

It added: "We call on the EU Commission to adopt a "polluter pays" principle and to end the indefensible exemption of polluting long-haul flights from EU enviro regulation."

Key highlights of the report include:

● Traffic grew 10% to 55.5m, despite multiple Boeing delivery delays.

● Revenue per passenger flight fell 10% (average fare down 15%, with ancillary revenue flat).

● 156 new B737 "Gamechangers" now work in the 594-craft fleet at June 30.

● A record summer schedule includes five new bases and more than 200 new routes.

● More than 50% of a €700m share buyback is now completed.

As a result of the news, Ryanair shares took a 12.5% hit on Monday morning, while amid the ongoing fallout from the CrowdStrike Windows debacle, share prices for the entire sector also suffered.

Ryanair said it saw 400 flight cancellations over the weekend as a consequence of the global software update error.