Ryanair has expressed disappointment in its recent business performance, with its stock falling by 17% following a quarterly earnings report that did not meet expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), nearly unchanged from the previous year, while profits plummeted to €336 million, down almost 50%. CEO Michael O’Leary noted that although more passengers are flying with Ryanair, the airline has had to exert significant effort to achieve this growth.
During the earnings call, O’Leary explained that traffic growth was robust, with a 10% increase that brought in 55 million passengers, but this growth comes at a cost. He indicated that the airline has been compelled to consistently lower fares and boost bookings, which have proven to be disappointing, particularly as the peak summer months approach.
In addition to the weaker demand, the airline is grappling with rising labor costs and has attributed some of its challenges to delays in aircraft deliveries from Boeing, a longstanding issue for O’Leary. He has previously defended the airline despite a mid-flight incident involving a 737 Max 9 but continues to urge Boeing to improve its performance.
Moreover, O’Leary shared that consumers appear to be feeling the effects of ongoing inflation and slow economic growth within the European Union. He mentioned that this situation might result in Ryanair operating fewer aircraft than initially planned for summer 2025, leading to two years of minimal capacity growth. O’Leary suggested that operating with less capacity could be beneficial if consumer pressure persists during the upcoming year to 18 months.