Ryanair has expressed disappointment regarding its recent business performance, which has also impacted investor sentiment. The budget airline’s stock has plummeted by 17% following a quarterly earnings report that fell short of expectations. While revenue remained steady at €3.6 billion ($4 billion), profits were significantly reduced to €336 million, nearly half of what they were previously. CEO Michael O’Leary noted that although passenger numbers have risen to 55 million—an increase of 10%—this growth comes at a cost, necessitating substantial efforts to attract customers.
During the earnings call, O’Leary highlighted the challenges faced in generating bookings and maintaining favorable fare conditions. He remarked that the demand for close-in bookings has been underwhelming, especially as the company approaches the peak travel months of July, August, and September.
In addition to declining demand, Ryanair is grappling with increased labor costs and has pointed to delays in aircraft deliveries from Boeing, an ongoing frustration for O’Leary. Although he has remained supportive of Boeing despite issues such as the mid-flight emergency related to a 737 Max 9 earlier this year, he has called for improvements in their operations.
Furthermore, O’Leary noted that consumer financial pressure appears to be escalating as inflation and sluggish economic growth weigh on individuals in the European Union. Consequently, he speculated that operating a reduced number of aircraft in the coming years could benefit Ryanair. He indicated that the airline would have lower capacity for the summer of 2025 than initially planned and anticipates a period without capacity growth for two years, which could be advantageous if consumer spending remains constrained.