Ryanair has expressed disappointment in its recent business performance, leading to a 17% drop in its stock following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenues of €3.6 billion ($4 billion), which remained flat compared to the previous year. However, profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that, while passenger numbers rose by 10% to 55 million, this increase comes at a cost, as the airline has had to work hard to stimulate fare and booking activity.
O’Leary highlighted that demand has softened, with close-in bookings underperforming expectations ahead of the crucial summer months of July, August, and September. The airline has also faced challenges from rising labor costs and has pointed fingers at Boeing over ongoing delivery delays, a concern O’Leary has raised repeatedly in the past.
The CEO acknowledged that customers seem to be feeling more financial pressure compared to the initial stages of the COVID-19 recovery. Given the current economic situation in the European Union, with inflation and stagnant growth affecting consumer behavior, O’Leary hinted that a reduction in flight capacity might ultimately be beneficial for Ryanair.
He mentioned that the airline expects to have less capacity in summer 2025 than originally planned due to Boeing’s delivery issues, followed by two years of minimal capacity growth. O’Leary suggested that navigating through the anticipated consumer pressures in the next year or 18 months might not be the worst scenario for the airline.