Ryanair has expressed disappointment regarding its business performance, which has frustrated investors as well. Following the release of its quarterly earnings report, the Irish budget airline’s stock plummeted by 17%. The company reported revenues of €3.6 billion ($4 billion), which remained on par with last year’s figures. However, profits were nearly halved, falling to €336 million. CEO Michael O’Leary noted that while passenger numbers have increased, significant effort is required to maintain this growth.
During the earnings call, O’Leary pointed out that passenger traffic grew by 10% to 55 million. Yet, he emphasized that this growth comes at a cost, stating, “And we’re having to repeatedly stimulate fares and bookings. The close-in fares and performance, particularly heading into the peak months of July, August, and September, have been disappointingly weak.”
In addition to softer demand, Ryanair is also contending with rising labor costs and has criticized Boeing for ongoing delivery delays, a recurrent issue for O’Leary. Despite previously standing by the manufacturer after a mid-flight incident with a 737 Max 9 earlier this year, he has urged Boeing to improve its operations.
O’Leary remarked to investors that consumers seem to be feeling more financial strain compared to the early stages of the COVID-19 economic recovery. Reports suggest that years of inflation and stagnant economic growth are beginning to impact individuals in the European Union. He indicated that a reduction in the airline’s capacity might actually benefit Ryanair in this challenging climate.
“We will have less capacity into summer 2025 than we were originally scheduled to have with our Boeing delivery, and then we’re facing two years without any capacity growth at all,” O’Leary stated. “If consumers are facing economic pressure over the next year or 18 months, that might not be the worst situation for us.”