Ryanair has expressed disappointment in its business performance, which is mirrored by investor sentiments. The Irish budget airline saw its stock drop by 17% following a quarterly earnings report that fell short of expectations. Although revenue stayed steady at €3.6 billion ($4 billion), profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the airline has had to make considerable efforts to attract them.
O’Leary stated during the earnings call that passenger traffic increased by 10% to 55 million, but emphasized that this growth comes at a price. He remarked, “We’re having to repeatedly stimulate fares and bookings,” pointing out disappointing performance in close-in bookings as the peak travel months of July, August, and September approach.
In addition to weaker demand, Ryanair is grappling with rising labor costs and has attributed part of its struggles to delays in aircraft deliveries from Boeing, a longstanding issue for O’Leary. Despite past challenges, including a mid-flight incident with a 737 Max 9, he has been vocal about urging Boeing to improve its operations.
O’Leary also indicated that consumers may be facing greater difficulties than they did during the early recovery from COVID-19, as years of inflation and sluggish economic growth are taking their toll on individuals in the European Union. He suggested that a reduction in the number of operating aircraft could be beneficial for Ryanair.
He stated, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all.” He added that if consumer pressure continues for the next year or 18 months, this might not be an unfavorable position for the airline to be in.