Ryanair has expressed dissatisfaction with its recent business performance, leading to disappointment among investors as well. The Irish budget airline’s stock has plummeted by 17% following a quarterly earnings report that fell short of expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), comparable to last year, but profits nearly halved to €336 million. CEO Michael O’Leary acknowledged that while more people are flying with Ryanair, the airline is facing challenges to maintain this growth.
O’Leary stated during the earnings call that traffic growth has risen by 10%, reaching 55 million passengers, but emphasized that this growth comes at a cost. He noted the need to frequently stimulate fares and bookings, and mentioned disappointing close-in bookings as they approached the peak travel months of July, August, and September.
Alongside declining demand, Ryanair is grappling with increased labor costs and has pointed fingers at Boeing for ongoing delivery delays, a recurring issue that has frustrated O’Leary. Despite standing by the company after a mid-flight incident involving a 737 Max 9, he has long urged the manufacturer to improve its delivery schedules.
Additionally, O’Leary informed investors that Ryanair’s customers seem to be feeling the pressure more than they did during the initial phases of the economic recovery from COVID-19. Reports indicate that ongoing inflation and slowing economic growth are beginning to weigh on consumers in the European Union.
In light of these factors, O’Leary mentioned that Ryanair will have reduced capacity for the summer of 2025 compared to the original schedule, with two years of essentially no growth anticipated. He speculated that if consumers continue to face economic pressure over the next year and a half, this scenario could potentially benefit Ryanair.