Ryanair is expressing disappointment with its recent business performance, a sentiment echoed by its investors as the airline’s stock has dropped by 17%. The Irish low-cost carrier reported quarterly earnings that fell short of expectations, with revenue remaining unchanged at €3.6 billion ($4 billion) compared to the previous year. Net profits nearly decreased by half, totaling €336 million. CEO Michael O’Leary highlighted that while passenger traffic has increased by 10% to 55 million, the growth comes at a price, indicating the company is having to significantly incentivize fare bookings.
During the earnings call, O’Leary noted that the surge in traffic is strong but requires substantial effort to maintain. He mentioned that close-in bookings have been unexpectedly weak as the airline approaches its peak travel months of July, August, and September.
Additionally, Ryanair is facing challenges from rising labor costs and continues to contend with delays in aircraft deliveries from Boeing, a persistent issue for O’Leary. Despite past incidents, including a mid-flight door plug blow-out on a 737 Max 9, O’Leary has consistently urged Boeing to improve its operations.
Moreover, O’Leary indicated that Ryanair’s customers appear to be feeling the impact of ongoing inflation and stagnant economic growth in the European Union, suggesting that this could result in the airline scaling back operations. He stated that the company will have less capacity in summer 2025 than originally projected due to Boeing delivery setbacks, which could potentially be advantageous if consumer spending continues to be under pressure in the coming year to 18 months.