Ryanair has expressed disappointment in its business performance, leading to dissatisfaction among investors as well. The Irish low-cost airline’s stock has dropped 17% following a quarterly earnings report that fell short of expectations. The revenue for the period reached €3.6 billion ($4 billion), remaining steady compared to the previous year, while profits plummeted nearly 50% to €336 million. CEO Michael O’Leary indicated that while the airline is attracting more passengers, it requires significant effort to maintain this growth.
O’Leary noted during the earnings call that passenger traffic has increased by 10%, reaching 55 million travelers, but emphasized that this growth is dependent on pricing. He mentioned the need to continuously stimulate fares and bookings, highlighting disappointing results in close-in fares as the peak summer months approach.
Additionally, Ryanair is facing challenges from rising labor costs and delays in aircraft deliveries from Boeing, a long-standing issue for O’Leary. Despite standing by the manufacturer after a mid-flight incident involving a 737 Max 9 earlier this year, he has consistently urged Boeing to improve its operations.
O’Leary also pointed out that Ryanair’s customers seem to be feeling more financial pressure compared to earlier in the post-COVID economic recovery. According to reports, years of inflation and sluggish economic growth are beginning to affect consumers in the European Union. As a result, he suggested that operating fewer aircraft may actually benefit Ryanair going forward.
“We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing deliveries, and after that, we are looking at a period of no capacity growth for two years,” O’Leary stated. “If consumers continue to feel pressured over the next 12 to 18 months, that might not be the worst situation for us.”