Ryanair has expressed disappointment over its recent business performance, which has also left investors dissatisfied. The stock of the Irish budget airline has plummeted by 17% following a quarterly earnings report that fell short of expectations. Revenue for the period stood at €3.6 billion ($4 billion), virtually unchanged from the previous year, but profits dropped significantly by nearly half to €336 million. CEO Michael O’Leary noted that while more passengers are flying with the airline, efforts to attract customers are becoming increasingly challenging.
O’Leary highlighted that traffic growth is robust, with a 10% increase to 55 million passengers, yet this surge comes at a cost. He mentioned on the earnings call that stimulating fares and bookings has become necessary, and that close-in bookings and performance have been disappointingly weaker than anticipated, especially as peak months of July, August, and September approach.
In addition to lower demand, the airline is grappling with rising labor costs and has pointed fingers at Boeing for delays in aircraft deliveries, a longstanding grievance for O’Leary. Despite recent issues, such as a mid-flight incident involving a 737 Max 9, he has remained a staunch advocate for the airline while urging the manufacturer to improve its reliability.
O’Leary also indicated that customers are feeling more financial strain than earlier in the economic recovery from the COVID-19 pandemic. Reports suggest that prolonged inflation and stagnated economic growth are affecting consumers in the European Union. Consequently, he mentioned that operating fewer aircraft might be advantageous for Ryanair during this challenging period.
“We will have less capacity into summer 2025 than originally planned with our Boeing deliveries, and there will be essentially no capacity growth for the next two years,” he stated. “If consumers are under pressure for the next year to 18 months, being in this position might not be unfavorable.”