Ryanair is expressing disappointment in its recent business performance, which has led to frustration among investors. Following the release of a quarterly earnings report that fell short of expectations, the Irish budget airline’s stock plummeted by 17%. The company reported revenue of €3.6 billion ($4 billion), virtually unchanged from the previous year, while profits saw a significant drop, nearly halving to €336 million. CEO Michael O’Leary indicated that although more passengers are flying with Ryanair, attracting them has become increasingly challenging.
O’Leary highlighted a strong growth in passenger traffic, which increased by 10% to 55 million. However, he emphasized that this growth is occurring at a cost, as the company has had to constantly lower fares and stimulate bookings. He expressed concern over disappointing close-in fare performance and bookings, particularly as the peak months of July, August, and September approach.
Additionally, the airline is grappling with higher labor costs and has attributed some issues to delays in Boeing’s aircraft deliveries, a situation that has long been a point of contention for O’Leary. Despite standing by the company following an incident involving a 737 Max 9 earlier this year, he has continued to call for improvements from Boeing.
O’Leary also pointed out that consumers in the European Union appear to be experiencing more financial strain now compared to the early stages of recovery from the COVID-19 pandemic. He suggested that operating fewer aircraft might benefit Ryanair in the current economic climate.
“We will have less capacity into summer 2025 than we were originally scheduled to have with our Boeing deliveries, and after that, we anticipate two years of essentially no capacity growth,” O’Leary said. “If consumers are under pressure for the next year or 18 months, that might not be the worst scenario for us.”