Ryanair is facing challenges in its business performance, leading to disappointment among investors as well. The Irish budget airline’s stock has fallen 17% following the release of a quarterly earnings report that came in below expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), unchanged from the previous year. However, profits saw a significant decline, nearly halving to €336 million. CEO Michael O’Leary noted that while there has been an increase in passenger numbers, the airline is working diligently to attract these customers.
With traffic growth up 10% to 55 million passengers, O’Leary highlighted that this increase is heavily dependent on pricing strategies, stating, “Traffic growth is strong, but it’s only strong at a price.” He added that the airline is having to stimulate fares and bookings more than anticipated, particularly as they approach the peak travel months of July, August, and September.
Ryanair is also grappling with rising labor costs and has attributed some of its struggles to delays in aircraft deliveries from Boeing, a recurring frustration for O’Leary. Despite a recent incident involving a 737 Max 9, O’Leary has continued to express frustration over Boeing’s performance over the years.
Moreover, the CEO pointed out that Ryanair’s customers seem to be feeling the effects of prolonged inflation and slowing economic growth in the European Union. He suggested that a reduction in flight capacity might actually benefit the airline in the current economic climate.
Looking ahead, O’Leary indicated that Ryanair would have less capacity for summer 2025 than originally planned due to delays in Boeing deliveries, and he projected that there would be no significant capacity growth over the next two years. He commented, “If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst place to be.”