Ryanair has expressed disappointment over its recent business performance, a sentiment echoed by investors as the airline’s stock prices plunged by 17% following a weaker-than-anticipated quarterly earnings report. The Irish low-cost carrier reported revenue of €3.6 billion ($4 billion), which remained stagnant compared to last year, while profits nearly halved to €336 million.
CEO Michael O’Leary noted that while passenger traffic increased by 10% to 55 million, the growth has come at a cost. He mentioned during the company’s earnings call that attracting more customers has necessitated aggressive fare promotions and that bookings in the lead-up to peak months have been weaker than expected.
Additionally, Ryanair is facing higher labor costs and continues to grapple with delays in aircraft deliveries from Boeing, a persistent issue highlighted by O’Leary. Despite a recent mid-flight incident with a 737 Max 9, he has remained critical of Boeing’s delivery performance while also affirming support for the company.
O’Leary also pointed out that Ryanair’s customer base appears to be feeling the strain of rising inflation and sluggish economic growth in the European Union, suggesting that a potential reduction in aircraft capacity might ultimately serve the airline well. He indicated that the airline expects to operate fewer planes than originally planned for the summer of 2025 and anticipates a two-year period with little to no growth in capacity, which may mitigate the impact of a tightening consumer market in the coming months.