Ryanair has expressed disappointment in its recent business performance, leading to a 17% decline in its stock following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenues of €3.6 billion ($4 billion), which remained on par with last year’s figures. However, profits took a significant hit, dropping nearly in half to €336 million. CEO Michael O’Leary mentioned that while the airline is successfully increasing passenger numbers, achieving this growth is becoming increasingly challenging.
During the earnings call, O’Leary noted, “Traffic growth is strong, up 10% to 55 million [passengers], but it’s only strong at a price.” He also highlighted the necessity of stimulating fares and bookings, stating that close-in fare performance has been disappointing, particularly ahead of the peak travel months of July, August, and September.
Adding to the challenges, Ryanair is grappling with rising labor costs and pointed to Boeing’s ongoing delivery delays as a factor affecting operations. O’Leary has a history of holding Boeing accountable for its shortcomings, especially after a recent incident involving a 737 Max 9.
Despite these difficulties, O’Leary observed that customers appear to be more financially strained than they were during the early recovery stages from the COVID-19 pandemic, with rising inflation and sluggish economic growth impacting European Union consumers. He indicated that decreasing the number of aircraft in operation could potentially benefit Ryanair in the long run.
“We will have less capacity into summer 2025 than we were originally scheduled to have with our Boeing deliveries, and then we’ll face two years of no capacity growth at all,” O’Leary explained. “If consumer pressure continues over the next year or 18 months, that might not be the worst place for us to be.”