Ryanair is expressing dissatisfaction with its recent business performance, a sentiment echoed by its investors. The Irish budget airline’s shares have fallen by 17% following the release of a quarterly earnings report that did not meet expectations. The company reported revenue of €3.6 billion ($4 billion), nearly unchanged from the previous year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while passenger traffic has increased by 10% to 55 million, this growth comes with significant challenges, as the airline must continually stimulate fares and bookings.
During the earnings call, O’Leary highlighted that close-in fare performance and bookings were disappointing, especially as the peak travel months of July, August, and September approached. In addition to reduced demand, Ryanair is grappling with rising labor costs and has pointed fingers at delays in Boeing’s aircraft deliveries. Despite standing by the company following an incident with a 737 Max 9 earlier this year, O’Leary has consistently urged the plane manufacturer to improve its delivery timelines.
O’Leary informed investors that the airline’s customers seem to be facing more financial strain compared to the early recovery phase following COVID-19. According to reports, persistent inflation and slowing economic growth are impacting consumers across the European Union. In light of this situation, O’Leary speculated that operating with a reduced number of aircraft might ultimately benefit Ryanair.
He confirmed that for summer 2025, Ryanair will operate fewer planes than initially planned due to issues with Boeing’s deliveries and forecasted a period of two years with negligible capacity growth. He suggested that if consumers continue to face economic pressures over the next year to 18 months, this could position Ryanair favorably moving forward.