Ryanair has expressed disappointment in its business performance, mirroring the sentiment of its investors. The Irish budget airline’s stock has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. Revenue remained flat at €3.6 billion ($4 billion), similar to last year’s figures, while profits nearly halved to €336 million.
CEO Michael O’Leary noted that while the airline is achieving robust traffic growth, with a 10% increase to 55 million passengers, it is becoming increasingly challenging to maintain this momentum without significant fare stimulation. He highlighted that the performance of last-minute bookings has been notably weaker than anticipated, particularly as the peak travel months of July, August, and September approach.
In addition to the reduced demand, Ryanair is grappling with higher labor costs and has attributed some of its challenges to delays in aircraft deliveries from Boeing, which has long been a point of frustration for O’Leary. Despite standing by the airline after a mid-flight incident involving a 737 Max 9, he has continuously urged Boeing to improve its operations.
O’Leary also mentioned that customers may be facing more financial strain compared to the earlier phases of the recovery from the COVID-19 pandemic. Reports indicate that prolonged inflation and sluggish economic growth are beginning to impact consumers in the European Union. In light of this, he suggested that having a reduced number of aircraft available might ultimately benefit Ryanair.
“We will have less capacity into summer 2025 than we initially anticipated due to Boeing’s delivery schedule, leading us into a period of two years with little to no capacity growth,” O’Leary explained. “If consumers continue to experience pressure over the next year to 18 months, this may not be the worst scenario for us.”