Ryanair is expressing disappointment with its recent business performance, a sentiment echoed by its investors. The budget airline’s stock has plummeted by 17% following a quarterly earnings report that fell short of expectations. The company’s revenue for the quarter stood at €3.6 billion ($4 billion), remaining virtually unchanged from last year. However, profits nearly halved to €336 million. CEO Michael O’Leary noted that while the airline is increasing passenger numbers, it is facing significant challenges in attracting customers.
O’Leary highlighted a 10% growth in passenger traffic, reaching 55 million, but cautioned that this increase comes at a cost. “We’re having to repeatedly stimulate fares and bookings,” he stated during the company’s earnings call, adding that the performance of close-in bookings has been disappointing, especially as the airline approaches its peak months of July, August, and September.
In addition to flagging demand, Ryanair is contending with rising labor costs and has pointed fingers at Boeing’s delivery delays, a long-standing issue for O’Leary. Despite earlier challenges, including a mid-flight incident with a 737 Max 9, he has consistently urged Boeing to improve its delivery schedule.
O’Leary also mentioned that Ryanair customers may be feeling greater financial pressure compared to the initial stages of the recovery from the COVID-19 pandemic, with inflation and sluggish economic growth impacting consumer behavior within the European Union. As a result, he suggested that a reduction in the number of aircraft could be advantageous for Ryanair.
“We will have less capacity into summer 2025 than we were originally scheduled to have with our Boeing delivery, and then we’re into two years of essentially no capacity growth at all,” O’Leary stated. “If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst place to be.”