Ryanair has expressed disappointment in its recent business performance, mirroring investors’ sentiments as its stock has plummeted by 17% following a quarterly earnings report that fell short of expectations. The Irish low-cost airline reported revenue of €3.6 billion ($4 billion), nearly unchanged from last year, but profits saw a significant decline, nearly halving to €336 million. CEO Michael O’Leary noted that while passenger numbers have increased by 10% to 55 million, this growth comes at a cost, necessitating efforts to stimulate fares and bookings.
He remarked on a disappointing trend in close-in bookings as the peak travel months of July, August, and September approach. In addition to slumping demand, Ryanair is facing rising labor costs while also attributing some challenges to delays in aircraft deliveries from Boeing, a longstanding issue for O’Leary.
Despite these challenges, O’Leary mentioned that the airline seems to be navigating a difficult landscape as consumers in the European Union contend with the impacts of inflation and stagnant economic growth. He suggested that scaling back the fleet could ultimately benefit Ryanair, stating, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all.” He concluded that adjusting to a more constrained capacity might be advantageous if consumer pressure persists over the next year to 18 months.