Ryanair Faces Turbulent Times as Stock Plummets 17% Amid Profit Decline

Ryanair is expressing disappointment over its business performance, reflecting a similar sentiment among investors as the airline’s stock has dropped by 17%. This decline follows the release of a quarterly earnings report that fell short of expectations. The budget airline reported revenue of €3.6 billion ($4 billion), which is comparable to last year’s figures, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that although there has been an increase in passenger numbers, the airline is facing challenges to maintain this growth.

During the earnings call, O’Leary stated that while traffic growth rose by 10% to 55 million passengers, this increase comes with significant pricing pressures. He highlighted the need for the airline to continually stimulate fares and bookings, noting that last-minute fare performance has been disappointing, especially heading into the peak travel months of July, August, and September.

In addition to weaker demand, Ryanair is contending with rising labor costs and has pointed to delays in aircraft deliveries from Boeing as a contributing factor. O’Leary has been critical of Boeing for years regarding these delivery issues, although he previously supported the company following an incident with a 737 Max 9 mid-flight.

O’Leary also conveyed that customers may be experiencing more financial difficulty now compared to the early pandemic recovery period, with inflation and slow economic growth impacting those in the European Union. He suggested that a reduction in fleet capacity might benefit Ryanair in the long run.

He indicated that the airline would have less capacity going into the summer of 2025 than initially planned due to Boeing’s delays, leading to two years of no capacity growth at all. He remarked that in light of potential consumer pressures over the next year to year and a half, this could result in a more favorable position for the airline.

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