By Conor Humphries

DUBLIN (Reuters) - Ryanair reported strong demand in Europe and expected fares to rebound to recover much of the decline in last year's weakening profits as consumers struggled with high interest rates.

"The demand for the entire network is strong across the entire network," Chief Financial Officer Neil Sorahan told Reuters in an interview. "We are divided into 37 different countries. We are seeing strong demand for the summer everywhere."

Europe's largest airlines fell 16% in annual profits for the 12-month deadline ended March 31 as Europe's largest airlines fell 16% in annual profits due to high demand and disputes with online travel agencies dropped fares by 7%.

"We're glad we're going to recover most of 7%, not all. So, I think it's a pretty good shift," Thorahan said.

The average fare is close to 7% compared to the March forecast by CEO Michael O'Leary in March.

Ryanair shares rose 3.4% to €0,733 in GMT. Last July, the airline's average fare fell by 13.41 euros after an average of 15% in the first quarter.

If the stock price stays 21 euros for 28 days, O'Leary may receive a bonus of nearly 100 million euros. It has been trading above that level since May 2.

The airline said fares for the three months to June are expected to increase year-on-year “high-middle teenagers percentage”, driven in large part by Easter time.

O'Leary said summer bookings are about 1% compared to the same period last year.

Ryanair's after-tax profit for the fiscal year was 1.61 billion euros ($1.8 billion), consistent with a poll by an analyst at the company.

The airline expects fuel hedging and cost control to help offset increased air traffic control costs and higher environmental taxes as new aircraft, so the current fiscal year will be “moderate unit cost inflation”.

Investors may respond positively to forecasts of moderate cost inflation and fare recovery estimates, Citi analysts said in a note.

Delivery on track

Ryanair flew record passengers in 12 months after pruning 205 million targets due to Boeing's delivery delays. It is expected that as of March 31, 2026, 206 million passengers will be driven this year.

"Our delivery is in great condition," Sorahan said.

Sorrahan said Ryanair also wants Boeing to deliver on agreed prices for current aircraft orders, even if the EU imposes reciprocity tariffs and the airline will reserve the right to cancel, if not, echoing O’Leiley’s earlier comments.