Ryanair has expressed dissatisfaction with its recent business performance, which has led to disappointment among investors. The Irish budget airline’s stock has fallen 17% following the release of a quarterly earnings report that was weaker than anticipated. Revenue for the quarter held steady at €3.6 billion ($4 billion), nearly identical to the previous year, while profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted an increase in passenger numbers, stating that while more people are flying with Ryanair, it is increasingly difficult to achieve this.
During the earnings call, O’Leary highlighted that traffic growth is robust, with a 10% rise to 55 million passengers. However, he emphasized this growth is reliant on pricing strategies, indicating that the airline has had to frequently stimulate fares and bookings. He underscored that close-in fares and performance were disappointing, particularly leading into the busy summer months of July, August, and September.
In addition to the softened demand, Ryanair is facing increased labor costs and has attributed some of the challenges to delays in aircraft deliveries from Boeing, a long-standing issue for O’Leary. Despite having defended the company after a mid-flight incident involving a 737 Max 9 earlier this year, he has consistently urged Boeing to improve its performance.
Moreover, O’Leary informed investors that customers seem to be experiencing more financial strain than they did during the initial recovery phases following the COVID-19 pandemic. With years of inflation and slowing economic growth impacting individuals in the European Union, he suggested that operating fewer aircraft might, in fact, benefit Ryanair.
He stated, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all. If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst place to be.”