Ryanair has expressed disappointment in its business performance, leading to a 17% drop in its stock following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), nearly the same as the previous year, but profits plummeted by almost 50% to €336 million. CEO Michael O’Leary noted that while passenger traffic has increased by 10% to 55 million, it comes at a cost, as the airline is forced to stimulate fares and bookings more than anticipated.
O’Leary highlighted that close-in bookings have been particularly disappointing, especially leading into the peak travel months of July, August, and September. Additionally, the airline faces challenges from rising labor costs and Boeing’s delivery delays, which have been a persistent issue for O’Leary. He has criticized Boeing for not improving its performance despite supporting the company after a mid-flight incident involving a 737 Max 9 earlier this year.
The CEO also indicated that Ryanair’s customers seem to be feeling the squeeze from the lingering effects of inflation and economic downturn in the European Union. In light of this, O’Leary suggested that having reduced capacity may ultimately benefit the airline. He stated that he expects less capacity going into summer 2025 due to delays in Boeing deliveries, with no significant capacity growth over the subsequent two years. He acknowledged that if consumer pressure continues over the next 12 to 18 months, operating fewer aircraft could be advantageous for Ryanair.