Ryanair has expressed dissatisfaction with its recent business performance, leading to a 17% drop in its stock value following a disappointing quarterly earnings report. The Irish low-cost airline reported revenue of €3.6 billion ($4 billion), which is comparable to the previous year. However, profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while the airline is successfully attracting more passengers, it is facing challenges in maintaining fare levels.
O’Leary highlighted that traffic had increased by 10%, reaching 55 million passengers, but emphasized that this growth comes at a cost. He indicated that the company has been compelled to incentivize fares and bookings significantly, with close-in bookings showing substantial weakness as they approach peak travel months.
In addition to weaker demand, Ryanair is grappling with rising labor costs and has credited Boeing’s delivery delays for some of its struggles. Despite favorable outcomes from handling a recent mid-flight incident with a 737 Max 9, O’Leary has long urged Boeing to improve its operations.
He also pointed out that consumers in the European Union seem to be facing more economic pressure lately, attributing this shift to prolonged inflation and sluggish economic growth. Consequently, O’Leary suggested that a reduction in flight capacity may ultimately benefit Ryanair.
He revealed that the airline expects to have less capacity for the summer of 2025 due to Boeing’s delivery issues and anticipates no growth in capacity for the following two years. O’Leary concluded that a tighter capacity scenario might be advantageous if economic pressures continue to affect consumers over the next year to 18 months.