Ryanair is expressing disappointment with its recent business performance, which has led to investor dissatisfaction as well. The Irish low-cost airline saw its stock fall by 17% following a quarterly earnings report that came in weaker than anticipated. Revenue remained steady at €3.6 billion ($4 billion), similar to the previous year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that, while more passengers are flying with Ryanair, attracting them is increasingly challenging.
O’Leary pointed out that although passenger traffic grew by 10% to 55 million, this growth comes at a cost. He mentioned the need for ongoing fare stimulation and highlighted that short-term bookings have been disappointing, particularly leading into the busier summer months of July, August, and September.
Additionally, the airline is facing challenges from rising labor costs and has cited Boeing’s ongoing delivery delays as a contributing factor. O’Leary has been vocal about his frustrations with Boeing, despite continuing to support the company after an incident this year involving a 737 Max 9.
Investors have been informed that Ryanair’s customers seem to be feeling the economic pressures more than they did during the initial recovery from COVID-19, with inflation and stagnant growth impacting people in the European Union. This situation may lead to a reduction in Ryanair’s operating capacity, which could actually benefit the airline in a difficult economic climate.
O’Leary explained that Ryanair will have lower capacity in the summer of 2025 than originally planned due to Boeing’s delivery issues, leading to a period of stagnation in capacity growth. He suggested that if consumer pressures continue over the next year or 18 months, this might position Ryanair advantageously.