Ryanair is facing disappointment in its business performance, leading to dissatisfaction among investors. The Irish budget airline’s stock price has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), which is roughly on par with last year’s figures. However, profits nearly halved, coming in at €336 million. CEO Michael O’Leary noted that while more passengers are choosing to fly with Ryanair, attracting these travelers is becoming increasingly challenging.
“Traffic growth remains robust, increasing by 10% to 55 million passengers, but this growth comes at a cost,” O’Leary remarked during the earnings call. He acknowledged that the airline has been forced to continually adjust fares and drive bookings. The performance of close-in bookings has been disappointing, particularly as the company approaches the peak travel months of July, August, and September.
Additionally, Ryanair is grappling with demand issues and rising labor costs, placing some of the blame on Boeing’s delays in aircraft deliveries, a longstanding concern for O’Leary. While he has supported Boeing despite a mid-flight incident involving a 737 Max 9 earlier this year, he has consistently urged the manufacturer to improve its operations.
O’Leary also informed investors that their customers seem to be experiencing more economic strain compared to earlier in the recovery from the COVID-19 pandemic. Reports indicate that years of inflation and stagnant economic growth are beginning to affect consumers in the European Union. As a result, operating with fewer aircraft may ultimately benefit Ryanair.
“We will have less capacity in the summer of 2025 than we originally anticipated due to Boeing’s delivery issues, and we expect no growth in capacity for the next two years,” O’Leary stated. “If consumers are under financial pressure for the upcoming year or 18 months, this could prove advantageous for us.”