Ryanair has expressed disappointment regarding its recent business performance, leading to investor dissatisfaction as well. The Irish budget airline’s stock has decreased by 17% following the release of a quarterly earnings report that was weaker than anticipated. The company’s revenue remained flat at €3.6 billion ($4 billion), the same level as the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary indicated that although more passengers are flying with Ryanair, it requires significant effort to achieve this.
O’Leary noted that while passenger numbers have increased by 10% to 55 million, this growth comes at a cost. “We are having to repeatedly stimulate fares and bookings,” he stated during the earnings call, pointing out that close-in bookings and fares have been disappointing, particularly ahead of the busy months of July, August, and September.
In addition to facing weaker demand, Ryanair is contending with rising labor costs and has attributed some challenges to delays in aircraft deliveries from Boeing, an ongoing issue for the airline. Despite recent challenges, O’Leary has remained supportive of Boeing after an incident involving one of their planes earlier this year, while continuing to urge the manufacturer to improve its operations.
O’Leary further mentioned that Ryanair’s customers seem to be experiencing more difficulties compared to the early stages of the economic recovery from the COVID-19 pandemic. According to reports, the impact of rising inflation and slowing economic growth is being felt by consumers within the European Union. As a result, O’Leary suggested that operating fewer aircraft might ultimately 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.” He added that this situation may not be adverse, considering the potential pressures on consumers over the next year and a half.