Ryanair is facing disappointment regarding its business performance, which has also left investors dissatisfied. The Irish budget airline’s stock has fallen by 17% following the release of a quarterly earnings report that was weaker than anticipated. Revenue remained steady at €3.6 billion ($4 billion), similar to last year’s figures, but profits plummeted nearly by half to €336 million. CEO Michael O’Leary indicated that while passenger numbers are increasing, attracting those customers has become increasingly challenging.
O’Leary noted on the company’s earnings call, “Traffic growth is strong, up 10% to 55 million passengers, but it’s only strong at a price. We’re having to stimulate fares and bookings repeatedly, and our performance and close-in bookings have been disappointing, particularly leading into the peak months of July, August, and September.”
In addition to the declining demand, Ryanair is contending with rising labor costs and has expressed frustration over Boeing’s delivery delays, a longstanding issue for O’Leary. Although he has supported the company after a mid-flight incident involving a 737 Max 9 earlier this year, he has urged Boeing to improve its operations.
O’Leary mentioned to investors that it seems customers are feeling the effects of inflation and slow economic growth within the European Union, suggesting that reducing the number of aircraft in operation could potentially benefit Ryanair. “We will have less capacity into summer 2025 than we originally planned with our Boeing deliveries, and then we will see two years with essentially no capacity growth,” O’Leary stated. “If consumers are under pressure for the next year or 18 months, that might not be the worst situation for us.”