Ryanair has expressed disappointment in its recent 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. The company’s revenue stood at €3.6 billion (approximately $4 billion), remaining flat compared to the previous year. However, profits plunged nearly 50% to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the airline is facing significant challenges in achieving this growth.
O’Leary commented on the earnings call that passenger traffic has increased by 10% to 55 million, but emphasized that this growth comes at a cost. He indicated that the company is having to continuously lower fares and stimulate bookings, particularly disappointed with performance leading into the peak travel months of July, August, and September.
In addition to declining demand, Ryanair is grappling with rising labor costs and lamenting delays in aircraft deliveries from Boeing, a recurring issue for O’Leary. Despite supporting Boeing after an incident involving a 737 Max 9 earlier this year, he has been urging the manufacturer to address its problems.
O’Leary also pointed out that customers seem to be facing greater financial strain compared to the early phases of the COVID-19 economic recovery, with inflation and a stagnant economy impacting consumer behavior in the European Union. He suggested that operating fewer airplanes might be advantageous for Ryanair under these conditions.
Looking ahead, O’Leary indicated that the airline expects to have reduced capacity in the summer of 2025 compared to its initial Boeing delivery schedule, projecting two years of minimal capacity growth. He concluded that if consumers are likely to continue facing financial pressure over the next year or 18 months, this situation may not be detrimental to Ryanair’s operations.