Ryanair is expressing disappointment regarding its recent business performance, which has led to investor reactions reflected in a 17% decrease in its stock value following a quarterly earnings report that fell short of expectations. The budget airline reported revenue of €3.6 billion ($4 billion), which is comparable to last year’s figures, but profits were dramatically reduced to €336 million.
CEO Michael O’Leary acknowledged that while the airline is attracting more passengers, it is also facing significant challenges. He noted a 10% increase in traffic, with passenger numbers reaching 55 million, but stressed that this growth comes at a certain price. O’Leary indicated that the company is continuously required to stimulate fares and bookings, experiencing disappointing performance in close-in bookings, particularly as peak travel months of July, August, and September approach.
In addition to a decline in demand, Ryanair is grappling with rising labor costs and has pointed a finger at Boeing’s ongoing delivery delays, a recurring issue for the airline. While O’Leary has shown support for Boeing despite previous incidents, he has repeatedly urged the manufacturer to improve its delivery timelines.
Furthermore, O’Leary mentioned that Ryanair’s customers seem to be facing more economic pressures now than during the initial stages of the recovery from the COVID-19 pandemic. Reports suggest that years of inflation and slow economic growth are impacting consumers in the European Union. As a result, O’Leary indicated that reducing the number of aircraft in operation could ultimately benefit Ryanair.
He stated, “We will have less capacity into summer 2025 than we originally scheduled with our Boeing deliveries, leading into two years of essentially no capacity growth at all.” O’Leary concluded by suggesting that this strategic shift might position the airline favorably as consumer spending remains constrained in the upcoming months.