Ryanair is experiencing disappointing business performance, leading to investor dissatisfaction. The Irish low-cost airline’s stock has fallen by 17% following a weaker-than-anticipated quarterly earnings report. Revenue remained flat at €3.6 billion ($4 billion) compared to last year, while profits plummeted nearly 50% to €336 million. CEO Michael O’Leary remarked that although the airline is attracting more passengers, significant effort is required to achieve this.
During the company’s earnings call, O’Leary noted, “Traffic growth is strong, up 10% to 55 million passengers, but it’s only strong at a price.” He acknowledged the need to continuously stimulate fares and bookings, mentioning that recent performance and close-in bookings have been disappointing, particularly as they approach peak months of July, August, and September.
In addition to diminished demand, Ryanair is facing increased labor costs and has partially attributed the downturn to Boeing’s ongoing delivery delays, which have long been a source of frustration for O’Leary. Despite a recent incident involving a 737 Max 9 mid-flight issue, he has consistently urged Boeing to improve its operations.
O’Leary indicated that consumers may be feeling the impact of ongoing inflation and sluggish economic growth within the European Union, which could affect spending habits. As a result, he mentioned that operating fewer aircraft might actually be beneficial for Ryanair in the long run.
“We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all,” O’Leary explained. “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.”