Ryanair has expressed disappointment over its latest business performance, leading to investor dissatisfaction as well. The Irish budget airline’s stock has fallen by 17% following the release of a quarterly earnings report that came in below expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), comparable to the same period last year, but profits plummeted by nearly half to €336 million. CEO Michael O’Leary noted that while the airline is increasing passenger numbers, it requires significant effort to do so.
Despite an increase in traffic with 55 million passengers, representing a growth of 10%, O’Leary highlighted that this growth is contingent on pricing strategies. He commented on the necessity to continuously stimulate fare and ticket sales, indicating that close-in bookings have fallen short of expectations, especially as the peak travel months of July, August, and September approach.
In addition to softer demand, Ryanair is facing rising labor costs and has pointed fingers at Boeing’s ongoing delivery delays, an issue that has frustrated O’Leary for years. While he has supported the company, notably after an incident involving a door plug on a 737 Max 9 mid-flight this year, he has called for improvements from the aircraft manufacturer.
O’Leary mentioned that Ryanair’s customers seem to be experiencing more financial strain compared to earlier in the recovery from the COVID-19 pandemic. According to reports, prolonged inflation and stagnating economic growth are starting to impact consumers in the European Union. He indicated that having a reduced fleet capacity could be advantageous for Ryanair in this context.
Looking ahead, O’Leary stated, “We will have less capacity into summer 2025 than we originally scheduled with our Boeing delivery, and we will face two years of essentially no capacity growth at all. If consumers are under financial pressure for the next year or 18 months, that might not be the worst position for us.”