Ryanair has expressed disappointment in its recent business performance, leading to frustration among investors as well. Following a quarterly earnings report that fell short of expectations, the budget airline’s stock plummeted by 17%. Revenue remained stable at €3.6 billion ($4 billion), similar to last year’s figure, but profits nearly halved to €336 million. CEO Michael O’Leary noted an increase in passenger traffic, reporting a 10% rise to 55 million travelers, but emphasized that this growth comes at a cost.
During the company’s earnings call, O’Leary stated, “Traffic growth is strong, but we’re having to stimulate fares and bookings repeatedly. The close-in bookings have been disappointing, particularly leading into the peak months of July, August, and September.”
Ryanair is also grappling with higher labor costs and is facing ongoing challenges due to delays in aircraft deliveries from Boeing, a persistent issue highlighted by O’Leary. While he has defended the airline following a safety incident involving a 737 Max 9 earlier this year, he has consistently urged Boeing to improve its performance.
Additionally, O’Leary pointed out that customers seem to be facing more financial pressure now than during the early stages of the COVID-19 recovery. Reports indicate that prolonged inflation and stagnant economic growth in the European Union are affecting consumer spending. This could potentially allow Ryanair to manage its operations more effectively with reduced jetliner capacity.
“We will have less capacity into summer 2025 than originally planned due to Boeing delivery issues, and thereafter we expect two years of minimal capacity growth,” O’Leary mentioned. He added that if consumer pressure continues over the next 12 to 18 months, it might not be the worst scenario for the airline.