Ryanair has expressed disappointment in its recent business performance, reflecting investor sentiment as well. The Irish budget airline’s stock has plummeted by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), nearly unchanged from the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary noted that while the airline is successfully increasing the number of passengers, it requires significant effort to achieve this growth.
O’Leary stated during the earnings call that passenger traffic has risen by 10%, totaling 55 million travelers, but emphasized that this growth comes at a price. He mentioned that the company must continuously stimulate fares and bookings, highlighting disappointing close-in fare performance as they approached the peak travel months of July, August, and September.
In addition to weaker demand, Ryanair is facing higher labor costs and cited Boeing’s delivery delays as another challenge, a longstanding issue that O’Leary has criticized over the years. Despite a recent incident involving a 737 Max 9 aircraft, O’Leary has remained optimistic but has urged Boeing to improve its operations.
O’Leary also indicated that customers seem to be experiencing more financial pressure compared to the earlier stages of the COVID-19 recovery. Reports suggest that prolonged inflation and stagnant economic growth are impacting consumer behavior in the European Union. Consequently, he mentioned that Ryanair may benefit from reducing its fleet capacity going into summer 2025, as the airline anticipates two years without significant capacity growth. If consumer pressure persists over the next year to 18 months, O’Leary believes this strategy could be advantageous.