Ryanair is experiencing dissatisfaction regarding its business performance, leading to investor disappointment as well. The Irish budget airline’s stock has plummeted by 17% following a quarterly earnings report that fell short of expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), reflecting no significant change from the previous year. However, profits nearly halved to €336 million. CEO Michael O’Leary indicated that while more people are flying with Ryanair, the airline is facing challenges to maintain this growth.
O’Leary noted that the airline’s traffic has increased by 10%, reaching 55 million passengers, but emphasized that this growth comes at a price. He mentioned that the airline is continually having to stimulate fares and bookings to encourage travel, with recent close-in bookings disappointing and significantly weaker than anticipated, especially heading into the busy summer months.
In addition to weaker demand, Ryanair is contending with rising labor costs and has criticized Boeing for its ongoing delivery delays, which have long been a point of frustration for O’Leary. Despite standing by the company after a mid-flight issue with a 737 Max 9 earlier this year, he has urged Boeing to improve its operations.
O’Leary also reported that customers seem to be experiencing more difficulties compared to the early days of the COVID-19 recovery, as rising inflation and sluggish economic growth impact consumers in the European Union. He suggested that operating a reduced number of aircraft could ultimately be beneficial for the airline.
Looking ahead, O’Leary stated that Ryanair would have less capacity in the summer of 2025 than initially planned due to Boeing’s delivery issues. He anticipates a period of no capacity growth for the next two years, which may not be detrimental if consumers continue to face financial pressures in the coming year to 18 months.