Ryanair has expressed disappointment in its recent business performance, which has also led to a decline in investor confidence. The Irish budget airline’s stock has dropped 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenues of €3.6 billion ($4 billion), nearly unchanged from the previous year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the airline has to exert significant effort to maintain this growth.
O’Leary highlighted that passenger traffic increased by 10% to 55 million, but this growth comes with heightened pricing pressures. He mentioned on the earnings call that the company faces challenges with close-in fares and bookings, which have been unexpectedly weak, especially as the peak travel months of July, August, and September approach.
Additionally, Ryanair is contending with rising labor costs and has criticized Boeing for its continued delivery delays. While O’Leary has supported Boeing despite issues such as the malfunctioning door plug on a 737 Max 9 aircraft earlier this year, he has consistently urged the manufacturer to improve its operations.
O’Leary also indicated that consumers in the European Union might be experiencing more financial strain compared to the early stages of the COVID-19 recovery. He suggested that a reduction in flight capacity might actually benefit Ryanair in the near future. “We will have less capacity into summer 2025 than we originally scheduled with our Boeing deliveries, and then we will see two years of essentially no capacity growth at all,” O’Leary explained. He added, “If the consumer is under pressure for the next year or 18 months, that might not be the worst situation for us.”