Ryanair is facing disappointment in its business performance, leading to dissatisfaction among investors. The budget airline’s stock has dropped by 17% following a release of quarterly earnings that fell short of expectations. The company’s revenue remained stable at €3.6 billion ($4 billion), comparable to last year’s figures. However, profits have seen a significant decline, nearly halving to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the company is exerting considerable effort to attract them.
O’Leary highlighted that traffic growth is robust, with a 10% increase to 55 million passengers, but this growth comes at a cost. He stated during the earnings call, “And we’re having to repeatedly stimulate fares and bookings.” He expressed concerns over disappointing close-in fares and bookings as the company heads into the peak travel months of July, August, and September.
In addition to weaker demand, Ryanair is grappling with rising labor costs and has expressed frustration over Boeing’s ongoing delivery delays, which have been a persistent issue for O’Leary. Despite past challenges, including a mid-flight incident with a 737 Max 9, he has consistently urged Boeing to improve its delivery timelines.
Furthermore, O’Leary mentioned that customers of the airline seem to be experiencing more financial strain compared to the early days of the COVID-19 recovery. According to Reuters, ongoing inflation and slow economic growth are beginning to impact consumers in the European Union. This scenario might lead to a situation where operating fewer aircraft could be advantageous for Ryanair.
“We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all,” O’Leary said. “And if the consumer is going to be under pressure for the next year or 18 months, that might not be the worst place to be.”