Ryanair has expressed disappointment with its recent business performance, which has similarly affected investor confidence, leading to a 17% drop in its stock following a less-than-expected quarterly earnings report. The Irish low-cost airline reported a revenue of €3.6 billion ($4 billion), roughly the same as the previous year; however, profits plummeted by nearly 50% to €336 million. CEO Michael O’Leary noted that while the airline is successfully attracting more passengers, it is facing challenges to maintain this growth.
O’Leary highlighted that passenger traffic has increased by 10% to 55 million, but this growth comes at a cost. He mentioned in the earnings call that the company is frequently having to stimulate fares and bookings, which have been disappointing, especially leading into the peak travel months of July, August, and September.
In addition to weaker demand, Ryanair is also contending with rising labor costs and has pointed fingers at Boeing for ongoing delivery delays. O’Leary has been critical of the planemaker for years but has continued to support the company after a mid-flight incident involving a 737 Max 9.
He informed investors that customers are now feeling the pressure more than they did in the early stages of recovery from the COVID-19 pandemic, as inflation and sluggish economic growth take their toll in the European Union. This might lead to a reduction in the number of aircraft operated by Ryanair.
O’Leary stated, “We will have less capacity into summer 2025 than we originally scheduled with our Boeing deliveries, and then we’re looking at two years of essentially no capacity growth at all.” He suggested that if consumer pressures continue over the next year to 18 months, this might not be detrimental for the airline.