Ryanair is facing challenges in its business performance, leading to disappointment among investors. The Irish low-cost airline’s stock has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), matching the previous year’s figures, but profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, attracting them is becoming increasingly difficult and costly.
O’Leary reported a 10% increase in passenger traffic, bringing the total to 55 million, but emphasized that this growth comes at a high price: “We’re having to stimulate fares and bookings repeatedly.” He expressed concern over disappointing close-in bookings, especially leading into the typically busy months of July, August, and September.
In addition to the decrease in demand, Ryanair is grappling with rising labor costs and has cited Boeing’s delivery delays as a long-standing issue. Despite a recent incident involving a 737 Max 9, O’Leary has continued to advocate for improvements from Boeing, urging the manufacturer to enhance its operational efficiency.
He also indicated that Ryanair’s customers are currently facing greater financial pressures compared to earlier in the post-COVID economic recovery. With ongoing inflation and slowing economic growth in the European Union, O’Leary suggested that having a limited number of aircraft might ultimately benefit the airline.
Looking ahead, he mentioned that the airline will operate with less capacity in summer 2025 than initially planned due to Boeing delivery issues, resulting in two years with essentially no capacity growth. He noted that this situation may actually serve Ryanair well if consumer spending remains under pressure over the next year to 18 months.