Ryanair is expressing disappointment with its recent business performance, which has also led to investor dissatisfaction. The stock of the Irish budget airline has fallen by 17% following the release of a quarterly earnings report that fell short of expectations. The company’s revenue remained unchanged at €3.6 billion ($4 billion) compared to the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary noted that although the airline is successfully attracting more passengers, it is requiring significant effort to achieve this.
O’Leary pointed out that traffic growth has increased by 10%, reaching 55 million passengers, but emphasized that this growth comes at a cost. He mentioned during the earnings call that the company is compelled to stimulate fares and bookings repeatedly, and that the performance of last-minute bookings has been disappointing, especially as the airline heads into the peak summer months.
In addition to facing declining demand, Ryanair is also contending with rising labor costs and has attributed some of its struggles to ongoing delivery delays from Boeing, a longstanding concern for O’Leary. Despite a recent incident involving a 737 Max 9, he has urged Boeing to improve its performance after years of frustration.
Moreover, O’Leary observed that Ryanair’s customer base appears to be facing more economic challenges compared to the earlier phases of the COVID-19 economic recovery. With inflation and slower economic growth impacting consumers in the European Union, he suggested that running fewer aircraft might actually be advantageous for Ryanair.
He stated that the airline would have reduced capacity for the summer of 2025 compared to initial plans based on Boeing deliveries, and indicated that the airline would not experience significant capacity growth in the following two years. O’Leary concluded that if consumers are under financial pressure for the next year or so, this situation might not be unfavorable for Ryanair.