Ryanair has expressed disappointment with its recent business performance, which has also affected investor sentiment. The Irish budget airline’s stock has dropped by 17% following the release of its latest quarterly earnings report, which fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), roughly equivalent to last year, yet profits saw a significant decline of nearly 50%, down to €336 million. CEO Michael O’Leary noted that although more passengers are flying with Ryanair, attracting them has required considerable effort.
“Traffic growth is robust, increasing by 10% to 55 million passengers, but it comes at a cost,” O’Leary stated during the company’s earnings call. “We are continually having to stimulate fares and bookings. Performance and close-in bookings have been significantly weaker than anticipated, particularly as we approach the peak travel months of July, August, and September.”
Additionally, Ryanair is contending with rising labor costs and has attributed some of its challenges to Boeing’s delays in aircraft deliveries, a ongoing issue for O’Leary. Despite standing by Boeing after an incident involving a 737 Max 9 mid-flight, he has consistently urged the aircraft manufacturer to improve its operations.
O’Leary also indicated that customers of Ryanair seem to be facing more financial pressures than they did in the early recovery phase from the COVID-19 pandemic. According to reports, prolonged inflation and sluggish economic growth within the European Union are beginning to take a toll on consumers. As a result, the airline may benefit from operating a reduced number of aircraft.
“We will have less capacity this summer compared to our original delivery schedule with Boeing, followed by two years of virtually no capacity growth,” O’Leary explained. “If consumers are under financial stress for the next year or 18 months, this might not be the worst situation for us.”