Ryanair’s business performance has disappointed both the airline and its investors, resulting in a 17% drop in the company’s stock following a lackluster quarterly earnings report. The Irish low-cost airline reported revenue of €3.6 billion ($4 billion), which is on par with the previous year. However, profits plummeted to €336 million, nearly half of what they were before. CEO Michael O’Leary noted that, while more passengers are choosing to fly with Ryanair, the airline is facing challenges in maintaining this growth.
O’Leary pointed out that traffic is up 10% with 55 million passengers, but emphasized that significant efforts and pricing strategies are required to achieve this increase. He expressed concerns about disappointing close-in bookings and fares leading into the busy summer months of July, August, and September.
In addition to declining demand, Ryanair is grappling with rising labor costs and ongoing delays in aircraft deliveries from Boeing, a recurring issue for O’Leary. Despite recent incidents involving the airline’s fleet, he continues to urge Boeing to improve its delivery timelines.
Moreover, O’Leary indicated that consumers in the European Union appear to be facing greater financial pressures now than earlier in the economic recovery post-COVID-19. With this situation in mind, he suggested that operating fewer aircraft might ultimately work in Ryanair’s favor.
He stated, “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.” O’Leary added that facing a challenging consumer environment for the next year to 18 months could potentially benefit Ryanair in the long run.