Ryanair is expressing disappointment with its business performance, leading to dissatisfaction among investors. The Irish budget airline’s share price has dropped by 17% following its latest quarterly earnings report, which was weaker than anticipated. The company reported revenue of €3.6 billion ($4 billion), remaining flat compared to the previous year, while profits saw a significant decline, nearly cut in half at €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the airline is making greater efforts to boost occupancy.
O’Leary emphasized during the earnings call that traffic growth is robust, with a 10% increase to 55 million passengers, but this growth comes at a cost. The airline has had to incentivize fares and manage weak close-in bookings, particularly leading into the busy travel months of July, August, and September.
In addition to the softness in demand, Ryanair is facing higher labor costs and has pointed to Boeing’s delivery delays as another challenge, a persistent issue that O’Leary has criticized for years. Despite enduring difficulties, including an incident with a 737 Max 9 earlier this year, he has remained committed to pushing Boeing for improvements.
O’Leary observed that consumers appear to be facing more challenges than earlier in the economic recovery following COVID-19. Reports suggest that years of inflation and slow economic growth are beginning to impact individuals within the European Union. He mentioned that operating fewer aircraft might actually benefit Ryanair in the current climate.
Looking ahead, O’Leary stated that the airline anticipates having less capacity for the summer of 2025 than initially scheduled due to Boeing delivery issues, followed by two years of virtually no growth in capacity. He concluded that, given the potential financial pressures on consumers over the next year to 18 months, this situation might ultimately be advantageous for the airline.