Ryanair is facing challenges in its business performance, leading to disappointment among investors as the airline’s stock plummets 17% following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), comparable to last year’s figures. However, its profits nearly halved, dropping to €336 million. CEO Michael O’Leary emphasized that while the airline is successfully increasing its passenger numbers, it requires significant effort to do so.
O’Leary noted that although passenger traffic grew 10% to 55 million, achieving this growth came at a cost. He mentioned that there is a necessity to continually stimulate fares and bookings, and that close-in fares and bookings have been disappointing, especially leading into the peak travel months of July, August, and September.
In addition to declining demand, Ryanair is grappling with rising labor costs and has attributed some issues to delays in aircraft deliveries from Boeing, a longstanding frustration for O’Leary. Despite challenges, he has remained supportive of the company following an incident with a 737 Max 9 earlier this year while also urging Boeing to improve its operations.
O’Leary further indicated that Ryanair’s customers seem to be feeling the effects of prolonged inflation and sluggish economic growth within the European Union. He suggested that operating a reduced fleet could benefit Ryanair in the coming years.
He stated, “We will have less capacity into summer 2025 than we were originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all. 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.”