Ryanair is expressing disappointment with its recent business performance, leading to disappointment among investors as well. The Irish budget airline has seen its stock fall by 17% following a quarterly earnings report that was weaker than anticipated. The company reported revenue of €3.6 billion ($4 billion), which is roughly the same as the previous year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while more passengers are flying with the airline, attracting these customers has become increasingly challenging.
O’Leary indicated during the earnings call that traffic growth was strong, rising by 10% to 55 million passengers; however, this growth has come at a cost. “We’re having to repeatedly stimulate fares and bookings. The close-in fares and performance have been disappointing and materially weaker than we expected, especially leading into the peak months of July, August, and September,” he stated.
In addition to facing softer demand, Ryanair is grappling with rising labor costs and has pointed to delays in aircraft deliveries from Boeing as a contributing factor. O’Leary, who has previously stood by Boeing despite a mid-flight incident with a 737 Max 9, has been urging the manufacturer to improve its delivery timelines.
The company is observing that its customers seem to be feeling the effects of ongoing inflation and slowing economic growth within the European Union, which may impact travel habits. As a result, O’Leary suggested that having fewer aircraft in operation might ultimately benefit Ryanair in the coming years.
“We will have less capacity in the summer of 2025 than we were originally scheduled to have due to Boeing’s delivery issues, leading us into two years with essentially no capacity growth,” O’Leary explained. “If consumers are under financial pressure for the next year or 18 months, it may not be the worst situation to be in.”