Ryanair Faces Turbulence as Profits Plummet and Stocks Dive

Ryanair has expressed disappointment with its recent business performance, leading to similar sentiments among its investors. The Irish budget airline’s stock has dropped by 17% following a quarterly earnings report that was weaker than anticipated. Revenue remained stable at €3.6 billion ($4 billion), roughly matching last year’s figures. However, profits have nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, attracting them has become increasingly challenging.

During the company’s earnings call, O’Leary reported a strong increase in traffic, with 55 million passengers representing a 10% rise. However, he emphasized that this growth was primarily driven by price adjustments. He mentioned that the close-in fares and booking performance have been disappointingly weaker than expected, particularly as the peak travel months of July, August, and September approach.

In addition to softer demand, Ryanair is also facing higher labor costs and has expressed frustration over delivery delays from Boeing, a longstanding issue for O’Leary. While he has supported the company after a mid-flight incident involving a 737 Max 9, he continues to urge Boeing to enhance its operational efficiency.

O’Leary observed that Ryanair’s customers seem to be experiencing more financial strain compared to the earlier phase of the economic recovery following COVID-19. The ongoing impacts of inflation and slowing economic growth in the European Union are becoming evident. As a result, O’Leary suggested that operating fewer aircraft in the coming years may ultimately benefit the airline.

“We will have less capacity into summer 2025 than we originally scheduled with our Boeing deliveries, followed by two years of essentially no capacity growth,” O’Leary explained. “If consumers remain under financial pressure for the next year or 18 months, this situation may not be unfavorable for us.”

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