Ryanair is expressing dissatisfaction with its recent business performance, leading to disappointment among investors as well. The Irish low-cost airline’s stock has plummeted by 17% following the release of a less-than-expected quarterly earnings report. Revenue remained steady at €3.6 billion ($4 billion), similar to last year, while profits experienced a significant decline, nearly halving to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, attracting them has required considerable effort.
During the earnings call, O’Leary explained that passenger traffic grew by 10%, reaching 55 million travelers, but emphasized that this growth comes at a cost. The airline has had to continuously stimulate fares and bookings, with disappointing results noted, particularly leading into peak months such as July, August, and September.
In addition to softer demand, Ryanair is grappling with increased labor costs and has criticized Boeing for ongoing delivery delays, which have been a longstanding frustration for O’Leary. Despite having defended the company after a mid-flight incident with a 737 Max 9 earlier this year, he has urged Boeing to improve its operations.
O’Leary also highlighted that customers seem to be facing heightened financial pressures compared to the early recovery period after COVID-19. The impact of inflation and slowing economic growth within the European Union appears to be affecting consumer behavior. He mentioned that Ryanair anticipates having less capacity available for the summer of 2025 than initially planned due to Boeing delays, resulting in two years of stagnant capacity growth. He suggested that in light of the economic challenges expected to continue over the next year to 18 months, this may not be the worst scenario for the airline.