Ryanair is expressing disappointment with its recent business performance, and investors share the sentiment. The Irish low-cost airline’s stock has dropped by 17% following the release of a quarterly earnings report that fell below expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), equivalent to last year’s figures. However, profits have significantly declined, nearly halving to €336 million. CEO Michael O’Leary noted an increase in passenger traffic, reporting a 10% rise to 55 million passengers, but emphasized that it comes at a price.
During the earnings call, O’Leary remarked, “Traffic growth is strong, but it’s only strong at a price. We’re repeatedly having to stimulate fares and bookings, which have been disappointing, particularly ahead of the peak months of July, August, and September.”
In addition to weakened demand, the airline is facing increased labor costs and ongoing delivery delays from Boeing, an issue that has troubled O’Leary for years. Despite standing by Boeing following a mid-flight incident involving a 737 Max 9 earlier this year, he has repeatedly urged the manufacturer to improve its operations.
O’Leary conveyed concerns that Ryanair’s customers seem to be experiencing more financial strain than during the initial stages of the COVID-19 recovery, as years of inflation and stagnant economic growth affect consumers in the European Union. This scenario may lead to operational adjustments for Ryanair, which he suggests could ultimately be beneficial.
He stated, “We will have less capacity in the summer of 2025 than we originally scheduled with our Boeing deliveries, and then, we’re looking at two years of essentially no capacity growth. If consumer pressure continues for the next year or 18 months, that might not be the worst situation for us.”