Ryanair has expressed disappointment with its recent business performance, leading to a 17% drop in its stock value following a lackluster quarterly earnings report. The Irish budget airline reported revenue of €3.6 billion ($4 billion), nearly unchanged from the previous year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while there has been an increase in passenger numbers, the airline is facing challenges in stimulating fares and maintaining booking levels.
O’Leary stated on the earnings call that traffic growth is up 10% to 55 million passengers, but he emphasized that this increase comes at a price, as the company is having to work hard to attract customers. He highlighted disappointing results in short-term bookings heading into peak travel months in July, August, and September.
In addition to weak demand, Ryanair is grappling with rising labor costs and the impact of Boeing’s delayed aircraft deliveries, a recurring issue for O’Leary. Despite past incidents, such as a mid-flight emergency with a 737 Max 9, he has continued to urge Boeing to improve its performance.
O’Leary pointed out that consumers seem to be under more financial pressure now compared to the early stages of the post-COVID economic recovery. This situation could potentially lead to reduced capacity for Ryanair in summer 2025, as the airline may have fewer aircraft than initially planned due to delivery issues. He mentioned that with expectations of constrained consumer spending over the next year to 18 months, operating with reduced capacity might benefit Ryanair in the long run.