Ryanair is expressing disappointment in its recent business performance, a sentiment echoed by its investors. The Irish budget airline saw its stock decline by 17% following a quarterly earnings report that fell short of expectations. The company reported revenues of €3.6 billion ($4 billion), nearly unchanged from the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary indicated that although more passengers are flying with Ryanair—up 10% to 55 million—this growth comes at a cost, necessitating aggressive pricing strategies to drive demand.
During the earnings call, O’Leary highlighted that the strong traffic growth has required significant price incentives and that recent close-in fares and bookings have been disappointing, particularly heading into the peak summer months of July, August, and September.
Alongside weaker demand, Ryanair is also facing escalating labor costs and has pointed to ongoing delivery delays from Boeing as a contributing factor to its challenges. O’Leary, who has been vocal about his frustrations with Boeing, has remained supportive of the airline despite various issues, including a mid-flight incident involving a 737 Max 9 earlier this year.
The impact of inflation and sluggish economic growth in the European Union appears to be affecting customers’ purchasing power, leading O’Leary to suggest that reduced aircraft capacity might benefit the airline in the long run. He noted that Ryanair will have less capacity in summer 2025 than originally planned due to Boeing delivery issues, and he speculated that operating with fewer jets could be advantageous as consumer pressures persist over the next year to 18 months.