Ryanair has expressed disappointment in its recent business performance, a sentiment echoed by investors as the airline’s stock has plummeted by 17% following a quarterly earnings report that fell short of expectations. The Irish budget carrier reported revenue of €3.6 billion ($4 billion), which remained largely unchanged from the previous year. However, profits took a significant hit, nearly halving to €336 million. CEO Michael O’Leary noted that while more individuals are flying with Ryanair, the airline is facing challenges in maintaining this momentum.
During a recent earnings call, O’Leary highlighted a 10% increase in passenger traffic, reaching 55 million, but stated that this growth comes at a cost. “We are having to repeatedly stimulate fares and bookings,” he explained, pointing out that close-in fares and bookings have underperformed, particularly as the company heads into its peak months of July, August, and September.
In addition to the softer demand, Ryanair is contending with rising labor costs and has attributed some difficulties to ongoing delays in aircraft deliveries from Boeing. O’Leary has been vocal about his frustrations with Boeing, urging the manufacturer to resolve these ongoing issues.
Furthermore, O’Leary indicated that Ryanair’s customers seem to be feeling more economic pressure than in the earlier stages of the COVID-19 recovery. Reports suggest that inflation and stagnant economic growth are beginning to impact consumers across the European Union. In light of this, O’Leary mentioned that having a reduced capacity for summer 2025, due to Boeing delivery delays, might not be detrimental for the airline.
“We will operate with less capacity than originally planned, and we expect no capacity growth for the next two years,” O’Leary stated. He added that if consumer pressures persist over the next year to 18 months, it could position Ryanair favorably in the market.