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Airline warned in July Q2 fares could fall more than 10%

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Ryanair now says 5% fall looks 'reasonably accurate'

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European short-haul fare weakness has 'levelled out'

(Adds share price rise, background)

By Kate Abnett and Bart Biesemans

BRUSSELS, Aug 27 (Reuters) - Ryanair upgraded

its summer air fare outlook on Tuesday, with CEO Michael O'Leary

telling Reuters he no longer saw a risk of double-digit

percentage falls as European short-haul weakness had "levelled

out".

Ryanair's shares were up 5.7% at 1105 GMT, the third largest

gainer on the pan-European index, with rival easyJet

up 6.2%.

The Irish airline's shares fell 15% last month when O'Leary

warned of a downward trend in fares that could exceed 10% in its

key July-September quarter, heightening fears of a weak summer

for European airlines as a post-COVID boom peters out.

O'Leary said on Tuesday that a fall of 5% during that

period, which he described in July as the best-case scenario,

now "looks reasonably accurate".

The risk of what O'Leary described at the time as an "ugly

scenario" of double-digit falls in average fares "looks like it

has disappeared," he said in an interview in Brussels.

"While fares were kind of softening during April, May and

June, that has levelled out," O'Leary added.

Ryanair makes significant profit from high last-minute

fares, but in July O'Leary said consumers were refusing to buy

late high-price tickets, and only buying when the price was cut.

Asked if Ryanair was still seeing the same issue, O'Leary

said current price resistance was "not the same".

O'Leary also warned that deliveries from Boeing ( BA ) were

"continuing to slip slightly" and that there was a risk that

Ryanair would take delivery of just 20-25 of the 737 MAX

aircraft ahead of next summer, rather than the 29 scheduled.