Ryanair is expressing dissatisfaction with its recent business performance, resulting in a 17% decline in its stock following an earnings report that fell short of expectations. The budget airline reported revenue of €3.6 billion ($4 billion), which remained largely unchanged compared to last year. However, profits plummeted nearly 50% to €336 million. CEO Michael O’Leary highlighted that while more passengers are flying with Ryanair, attracting them has become increasingly challenging.
O’Leary noted during the company’s earnings call that passenger traffic grew robustly, up 10% to 55 million travelers, but emphasized that this growth is only sustainable at higher prices. He also pointed out issues with weak close-in bookings, particularly as the peak travel months of July, August, and September approach.
In addition to fluctuating demand, Ryanair is contending with rising labor costs and ongoing delays in aircraft deliveries from Boeing, which O’Leary has criticized for several years. Despite recent operational issues, including an incident involving a 737 Max 9, he continues to urge Boeing to improve its delivery schedules.
Moreover, O’Leary indicated to investors that customers may be experiencing more financial strain now than earlier in the recovery from COVID-19. Reports suggest that years of inflation and slowing economic growth within the European Union are affecting consumer behavior. He suggested that operating fewer aircraft might benefit Ryanair in the current economic climate.
Looking ahead, O’Leary mentioned that Ryanair expects to have reduced capacity for summer 2025 due to Boeing delivery issues, leading to two years with essentially no growth in capacity. He remarked that, considering potential consumer pressures over the next 12 to 18 months, this strategy might serve the airline well.