Ryanair is facing challenges in its business performance, leading to disappointment among investors. The Irish budget airline has seen its stock drop by 17% following a quarterly earnings report that fell short of expectations. The company’s revenue remained stable at €3.6 billion ($4 billion), roughly the same as last year, but profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with the airline—up 10% to 55 million—this growth comes at increased costs and requires significant effort.
During an earnings call, O’Leary mentioned, “Traffic growth is strong, but it comes at a price.” He explained that the company is having to stimulate fares and bookings, with disappointing performance in close-in bookings as the peak months of July, August, and September approach.
Ryanair is also contending with rising labor costs and delays in aircraft deliveries from Boeing, an ongoing issue for O’Leary. Although he has expressed confidence in the airline’s operations, including a recent incident involving a 737 Max 9 that occurred mid-flight, O’Leary has long called on Boeing to improve its delivery process.
He also noted that customers appear to be feeling the effects of years of inflation and slow economic growth within the European Union, suggesting that operating fewer aircraft might benefit Ryanair in the long run. O’Leary stated, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and for the next year or 18 months, that might not be the worst place to be.”