Ryanair is expressing dissatisfaction with its recent business performance, which has led to disappointment among investors. The Irish budget airline’s stock has plummeted by 17% following a quarterly earnings report that fell short of expectations. Revenue remained virtually unchanged at €3.6 billion ($4 billion) compared to the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary noted that although the airline is attracting more passengers, it requires significant effort to maintain this growth.
During the earnings call, O’Leary revealed that traffic had increased by 10% to 55 million passengers. However, he emphasized that this growth comes at a cost, stating that the company must frequently reduce fares and stimulate bookings. He admitted that the last-minute ticket sales and overall performance had been disappointing, particularly leading into the busy summer months of July, August, and September.
In addition to weaker demand, Ryanair is also facing rising labor costs and continues to grapple with delays in aircraft deliveries from Boeing, a recurring issue that O’Leary has highlighted for years. Despite addressing a recent operational incident involving a 737 Max 9, he has consistently urged Boeing to improve its delivery timelines.
O’Leary acknowledged that Ryanair’s customers seem to be feeling more pressure than they did earlier in the COVID-19 recovery period. According to reports, ongoing inflation and slow economic growth in the European Union are beginning to affect consumers. This situation may influence Ryanair’s operations going forward.
The CEO indicated that the airline would have less capacity for the summer of 2025 than initially projected due to Boeing delivery delays. He mentioned that the airline may experience two years of little to no capacity growth, suggesting that a reduction in fleet size during this period could be beneficial if consumer demand remains under pressure for the next year to 18 months.