Ryanair has expressed disappointment regarding its business performance, which has also left investors dissatisfied. The Irish budget airline’s stock has fallen by 17% following the release of a quarterly earnings report that did not meet expectations. The company’s revenue remained stable at €3.6 billion ($4 billion), on par with last year. However, profits have taken a significant hit, nearly halving to €336 million. CEO Michael O’Leary noted that while more passengers are choosing Ryanair, it has become increasingly challenging to maintain this growth.
O’Leary indicated that passenger traffic grew by 10% to 55 million, but achieving this growth has required aggressive pricing strategies. “We’re having to repeatedly stimulate fares and bookings,” he stated during the earnings call, mentioning that performance in close-in bookings has been disappointing as well, especially leading into the peak summer months.
In addition to softening demand, Ryanair is facing rising labor costs and has pointed to Boeing’s ongoing delivery delays as a contributing factor to its challenges. Despite supporting the airline after a mid-flight incident with a 737 Max 9 earlier this year, O’Leary has consistently urged Boeing to improve its performance.
He also noted that customers appear to be feeling the effects of inflation and stagnant economic growth in the European Union, which could potentially lead to a reduced operational capacity for Ryanair. “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery,” O’Leary said. “If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst position for us.”