Ryanair’s Bumpy Flight: Stock Plummets Amid Profit Drop and Rising Costs

Ryanair is expressing disappointment in its business performance, which has resulted in a 17% drop in its stock price following a quarterly earnings report that fell short of expectations. The budget airline reported revenue of €3.6 billion ($4 billion), remaining consistent with last year, but its profits were nearly cut in half, decreasing to €336 million. CEO Michael O’Leary noted that while more passengers are flying with the airline, achieving this growth is increasingly challenging.

O’Leary mentioned that passenger traffic has increased by 10%, totaling 55 million travelers, but this growth is heavily reliant on pricing strategies. He acknowledged the need for constant fare stimulation and said that both close-in fares and overall performance have been disappointing, particularly leading into the peak travel months of July, August, and September.

In addition to the weaker demand, Ryanair is grappling with rising labor costs and has cited Boeing’s ongoing delivery delays as a contributing factor to its struggles. O’Leary has been critical of Boeing, having supported the airline even after a mid-flight incident involving a 737 Max 9.

He also indicated that current economic conditions in the European Union, marked by inflation and sluggish growth, are affecting consumers more than they were in the initial stages of the COVID-19 recovery. As a result, he suggested that operating fewer aircraft might be beneficial for Ryanair in the coming years.

O’Leary revealed that the airline will have less capacity for the summer of 2025 compared to initial expectations related to Boeing deliveries, and anticipates two years of minimal capacity growth. He remarked that if consumer pressures continue for the next 12 to 18 months, such a strategy might prove to be advantageous.

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