Ryanair has expressed disappointment with its recent business performance, which has also led to investor discontent. The Irish budget airline’s shares have plummeted by 17% following a quarterly earnings report that fell short of expectations. The company’s revenue was reported at €3.6 billion ($4 billion), remaining on par with last year’s figures, but profits saw a significant decline, nearly halving to €336 million. CEO Michael O’Leary acknowledged that while more passengers are flying with Ryanair, achieving this growth has required considerable effort.
O’Leary mentioned during the earnings call that traffic growth is notable, with a 10% increase equating to 55 million passengers. However, he noted that this growth comes at a cost, necessitating ongoing fare stimulation and indicating that last-minute bookings and fares have not performed as anticipated, particularly in the peak travel months of July, August, and September.
In addition to encountering weaker demand, the airline is grappling with rising labor costs and has attributed some of its challenges to delivery delays from Boeing, a long-standing issue for O’Leary. While he has supported the company following a mid-flight incident with a 737 Max 9 earlier this year, he has repeatedly urged Boeing to resolve its delivery issues.
O’Leary also pointed out that consumers seem to be facing more challenges than they did during the initial economic recovery phase from the COVID-19 pandemic. According to reports, years of inflation and sluggish economic growth are having an impact on individuals in the European Union. As a result, Ryanair could potentially benefit from a decrease in the number of aircraft it operates.
“We will have less capacity into summer 2025 than we originally scheduled with our Boeing deliveries,” O’Leary stated. “For the next two years, we will see little to no capacity growth. If consumers are under pressure for the next year or 18 months, this might not be the worst situation for us.”