Ryanair is facing challenges in its business performance, prompting disappointment among investors. The Irish low-cost airline’s stock has fallen by 17% following the release of its quarterly earnings report, which revealed weaker-than-expected results. The company reported revenue of €3.6 billion ($4 billion), nearly identical to the previous year, but profits have plummeted to €336 million, a nearly 50% decrease. CEO Michael O’Leary noted that while passenger traffic has increased by 10% to 55 million, the growth is linked to competitive pricing and extensive efforts to engage customers.
During the earnings call, O’Leary highlighted that although customer numbers are rising, the airline is compelled to continually adjust fares and face disappointing close-in booking performance ahead of the peak travel months of July, August, and September.
In addition to softer demand, Ryanair is grappling with rising labor costs and has pointed to delays in aircraft deliveries from Boeing, a situation that has long frustrated O’Leary. Despite recent incidents with Boeing aircraft, he has maintained his support for the manufacturer but has urged it to expedite its operations.
He also expressed concerns that customers may be experiencing increased financial strain due to ongoing inflation and sluggish economic growth in the European Union. This context might lead to a strategic advantage for Ryanair, as O’Leary mentioned that the airline will operate fewer aircraft in the summer of 2025 than initially scheduled, resulting in two years without any capacity growth. He suggested that in a potentially challenging consumer market over the next 18 months, this could position the airline favorably.