Ryanair has expressed disappointment in its recent business performance, leading to a 17% drop in its stock value following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), which remained flat compared to last year, while profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the airline has to apply considerable effort to attract them.
During the earnings call, O’Leary mentioned that traffic growth is robust, increasing by 10% to 55 million passengers, but emphasized that this growth comes at a cost. He highlighted the need for ongoing fare stimulation and noted that recent close-in bookings have been underwhelming, particularly as the peak travel months of July, August, and September approach.
In addition to sluggish demand, Ryanair also faces rising labor costs and ongoing issues with Boeing’s aircraft delivery delays, which have been a persistent concern for O’Leary. Despite incidents such as a door plug failure on a 737 Max 9 earlier this year, he has remained committed to holding Boeing accountable for its performance.
O’Leary observed that Ryanair’s customers seem to be feeling the impact of years of inflation and slow economic growth in the European Union, suggesting that the airline might benefit from operating fewer jets during this challenging period. He indicated that Ryanair would have less capacity available for the summer of 2025 than previously planned due to delays, and that after that, the airline would experience two years of minimal capacity growth. He added that if the consumer market remains under pressure for the next year to 18 months, it may not be disadvantageous for the airline.