Ryanair has expressed disappointment in its business performance, reflecting investors’ dissatisfaction as well. The Irish budget airline’s stock has fallen by 17% following a quarterly earnings report that came in weaker than anticipated. The airline reported revenue of €3.6 billion ($4 billion), remaining flat compared to last year, while profits saw a significant decline nearly halving to €336 million. CEO Michael O’Leary noted that although the number of passengers has increased, attracting them has become increasingly challenging.
During a recent earnings call, O’Leary stated, “Traffic growth is strong, up 10% to 55 million passengers, but it’s only strong at a price. We are having to stimulate fares and bookings repeatedly. The close-in fares and performance, especially leading into the peak months of July, August, and September, have been disappointing and significantly weaker than we expected.”
In addition to softening demand, Ryanair is grappling with rising labor costs and has pointed fingers at Boeing for ongoing delivery delays, a recurring issue for O’Leary. Despite having backed Boeing after a minor incident involving a 737 Max 9 mid-flight earlier this year, he has been vocal about the need for improvements from the aircraft manufacturer.
O’Leary informed investors that consumers appear to be facing more challenges compared to the early stages of the post-COVID-19 economic recovery. Reports indicate that years of inflation and slowing economic growth are beginning to impact the purchasing power of people in the European Union. Under these circumstances, having fewer aircraft could potentially benefit Ryanair.
“We will have less capacity heading into summer 2025 than we originally planned due to Boeing delivery delays, and thereafter, we’re looking at two years with essentially no capacity growth,” O’Leary stated. “If consumers are expected to be under pressure for the next year or 18 months, that may not be the worst position for us to be in.”