Ryanair has expressed disappointment regarding its business performance, leading to investor dissatisfaction as well. The Irish budget airline’s stock has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), which is roughly the same as last year. However, profits nearly halved, plummeting to €336 million.
CEO Michael O’Leary noted that while the airline is successfully attracting more passengers, it requires significant effort to do so. “Traffic growth is strong, with a 10% increase to 55 million passengers, but it comes at a cost,” O’Leary stated during the earnings call. He added that the airline has been forced to continuously stimulate fare prices and bookings. The performance of close-in bookings has been particularly disappointing, especially as the peak months of July, August, and September approach.
Additionally, Ryanair is facing challenges due to increased labor costs, and O’Leary has attributed some difficulties to Boeing’s delivery delays, a long-standing issue for the airline. Despite supporting Boeing after a mid-flight incident with a 737 Max 9 this year, O’Leary has consistently urged the manufacturer to improve its delivery timelines.
O’Leary also indicated that customers appear to be experiencing more financial strain compared to the early recovery phase from the COVID-19 pandemic. Reports suggest that inflation and stagnant economic growth are affecting consumers within the European Union. Consequently, operating fewer aircraft in the near future might be advantageous for Ryanair.
“We will have less capacity in summer 2025 than our original Boeing delivery schedule indicated, leading to two years with essentially no capacity growth,” O’Leary remarked. “If consumers are under pressure for the next year or 18 months, this could turn out to be a beneficial positioning for us.”