Ryanair is facing challenges in its business performance, leading to disappointment from investors as the airline’s stock has dropped by 17% following a quarterly earnings report that fell below expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), which is roughly unchanged from the previous year, but profits have plummeted nearly 50% to €336 million. CEO Michael O’Leary acknowledged that, while the airline is attracting more passengers, achieving this growth requires significant effort.
O’Leary noted that traffic increased by 10%, reaching 55 million passengers, but emphasized that this growth comes at a cost, as the airline must continuously reduce fares and stimulate bookings. He expressed concerns about disappointing close-in booking numbers as the peak summer months of July, August, and September approach.
Additionally, the company is grappling with rising labor costs and has pointed fingers at Boeing for ongoing delivery delays, a recurring issue in O’Leary’s critiques of the manufacturer. Despite showing support for Boeing following an incident earlier this year with a 737 Max 9, O’Leary has consistently urged the company to improve its operations.
O’Leary also indicated that Ryanair’s customers appear to be experiencing more financial strain compared to the early stages of the economic recovery from the COVID-19 pandemic. He referenced how inflation and slow economic growth in the European Union are beginning to affect consumer behavior. In light of these challenges, he mentioned that operating with fewer aircraft might be beneficial for Ryanair.
“We will have less capacity into summer 2025 than originally planned due to Boeing’s delivery schedule, and we anticipate two years of essentially no capacity growth,” O’Leary stated. “If consumer spending remains under pressure for the next year or 18 months, this approach may not be the worst strategy.”