Ryanair has expressed disappointment in its recent business performance, resulting in a 17% drop in its stock value following the release of a quarterly earnings report that failed to meet expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), comparable to last year, but its profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while the airline is attracting more passengers, it is facing challenges in maintaining profitability.
O’Leary mentioned that passenger traffic rose by 10% to 55 million, but this growth comes at a cost. He indicated that the airline is compelled to frequently lower fares and stimulate bookings, particularly as demand has softened unexpectedly in the lead-up to peak travel months. He expressed concern over disappointing performance in close-in bookings.
In addition to weaker demand, Ryanair is contending with rising labor costs and has pointed a finger at Boeing’s delivery delays, a long-standing issue for O’Leary. Although he has defended Boeing after an incident involving a 737 Max 9 aircraft, he has repeatedly urged the manufacturer to improve its operations.
O’Leary further noted that consumer pressures may be increasing as years of inflation and stagnant economic growth take their toll on people in the European Union. He mentioned that Ryanair will likely reduce its flight capacity for summer 2025 compared to the original schedule due to these challenges. He suggested that operating a smaller fleet might be advantageous if consumer spending continues to be constrained over the next year to 18 months.