Ryanair has expressed dissatisfaction with its recent business performance, leading to disappointment among investors. Following the release of a quarterly earnings report that fell short of expectations, the airline’s stock has dropped by 17%. The company reported revenue of €3.6 billion ($4 billion), remaining relatively unchanged from the previous year, while profits nearly halved to €336 million.
CEO Michael O’Leary noted that although more passengers are choosing to fly with Ryanair, it requires significant effort to achieve this increase. He mentioned a 10% growth in passenger traffic, totaling 55 million travelers, but cautioned that this growth comes at a cost. O’Leary pointed out that the airline is continually having to stimulate fares and bookings, and the close-in bookings, particularly as the peak travel months of July, August, and September approach, have been disappointing.
In addition to the weaker demand, Ryanair is contending with rising labor costs and has attributed some challenges to delays in aircraft deliveries from Boeing, a recurring issue for O’Leary. Despite past incidents, such as a door plug issue on a 737 Max 9 earlier this year, he has consistently urged Boeing to improve its delivery performance.
Moreover, O’Leary acknowledged that Ryanair’s customers seem to be facing more difficulties compared to the early phase of the post-COVID recovery. According to reports, prolonged inflation and sluggish economic growth are affecting consumers in the European Union. He suggested that operating a smaller fleet might ultimately benefit Ryanair in the current climate.
“We will have less capacity for the summer of 2025 than initially planned due to Boeing delivery schedules, followed by two years of no growth in capacity at all,” O’Leary stated. “If consumers are under financial pressure for the next year or 18 months, being in this position might not be detrimental.”