Ryanair has expressed disappointment in its recent business performance, which has led to a 17% drop in its stock value following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), which remained stable compared to last year. However, profits plummeted nearly 50% to €336 million. CEO Michael O’Leary highlighted that while the number of passengers has increased by 10% to 55 million, the airline is faced with challenges in maintaining prices and bookings.
During a recent earnings call, O’Leary noted, “Traffic growth is strong, but it comes at a cost.” He mentioned that the company has had to continuously stimulate fares and bookings, particularly as the close-in performance has been disappointing, especially leading into the peak summer months.
In addition to the softer demand, Ryanair is grappling with rising labor costs and has pointed fingers at Boeing’s ongoing delivery delays, a long-standing issue for the airline. While O’Leary has continued to support Boeing despite technical difficulties with the 737 Max 9, he has urged the manufacturer to improve its operations.
Furthermore, O’Leary indicated that consumers may be feeling increased financial pressure as inflation and stagnant economic growth affect spending habits in the European Union. He suggested that operating fewer planes could potentially benefit Ryanair in this challenging environment. “We will have less capacity in summer 2025 than initially planned due to Boeing delivery issues, resulting in two years with essentially no growth in capacity,” he stated. “If consumers face pressure over the next 18 months, that might not be the worst scenario for us.”