Ryanair is expressing disappointment over its recent business performance, which has resulted in a 17% drop in its stock following an underwhelming quarterly earnings report. The Irish budget airline reported revenue of €3.6 billion ($4 billion), roughly on par with the previous year. However, profits nearly halved to €336 million. CEO Michael O’Leary noted that although more passengers are flying with Ryanair, the airline is facing challenges in maintaining that growth.
During the company’s earnings call, O’Leary commented on the strong traffic growth, stating that passenger numbers increased by 10% to 55 million, but emphasized that this growth is heavily dependent on pricing strategies. He mentioned that the airline has been compelled to stimulate fares and bookings, with close-in bookings performing weaker than anticipated, especially leading into the high travel months of July, August, and September.
In addition to reduced demand, Ryanair is also grappling with higher labor costs and has partly attributed its struggles to ongoing delays in aircraft deliveries from Boeing, a persistent issue for O’Leary. He has consistently urged the aircraft manufacturer to address these delays.
O’Leary further indicated that Ryanair’s customers seem to be experiencing more economic strain than earlier in the COVID-19 recovery phase, citing inflation and slowing economic growth within the European Union. He suggested that operating with a smaller fleet might be beneficial for Ryanair should consumer pressures continue.
“We will have less capacity into summer 2025 than originally scheduled due to Boeing’s delivery issues, which will lead to no capacity growth for two years,” O’Leary said. “If consumer spending remains under pressure for the next year or 18 months, that may not be the worst scenario for us.”