Ryanair has expressed disappointment in its recent business performance, leading to a 17% decline in its stock prices following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), nearly unchanged from the previous year, but profits plummeted to €336 million, almost half of last year’s figure. CEO Michael O’Leary noted that while the airline is successfully attracting more passengers, it is increasingly reliant on fare promotions to do so.
During the earnings call, O’Leary stated that traffic has increased by 10%, reaching 55 million passengers, but emphasized that this growth comes at a cost. He pointed out disappointing trends in close-in bookings as the company enters the peak travel months of July, August, and September, indicating a challenging environment.
In addition to weaker demand, Ryanair is grappling with higher labor costs and continues to face frustrations with delays in aircraft deliveries from Boeing. Although O’Leary has defended the company in light of recent mid-flight issues with the 737 Max 9, he has long urged Boeing to improve its delivery performance.
Furthermore, O’Leary has observed that consumer spending appears to be tightening as inflation and slow economic growth take their toll in the European Union. He mentioned that as a result, Ryanair will operate with less aircraft capacity through summer 2025 than originally planned, leading to two years of stagnant capacity growth. He suggested that this might not be detrimental for the airline, given the anticipated strain on consumer spending in the coming months.