Ryanair is expressing discontent with its recent business performance, leading to disappointment among investors as the airline’s stock has dropped 17% following a weaker-than-expected quarterly earnings report. The budget airline reported revenue of €3.6 billion ($4 billion), roughly unchanged from the previous year. However, profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while the airline is successfully increasing passenger numbers, it is facing challenges in maintaining ticket prices.
“Traffic growth is strong, increasing by 10% to 55 million passengers, but that comes at a cost,” O’Leary remarked during the company’s earnings call. He indicated that the airline has had to continually offer fare incentives and that recent bookings have been unsatisfactory, particularly as the peak travel months of July, August, and September approach.
In addition to softer consumer demand, Ryanair is also contending with rising labor costs and issues related to delayed aircraft deliveries from Boeing, which O’Leary has criticized for many years. Despite earlier operational setbacks, he has continued to support Boeing while urging the manufacturer to improve its performance.
Furthermore, O’Leary informed investors that the impact of prolonged inflation and slowing economic growth is beginning to affect their customers in the European Union more significantly than during the initial recovery from COVID-19. He suggested that operating fewer aircraft could potentially benefit Ryanair in the current economic climate.
“We will have less capacity in summer 2025 than we originally planned due to our Boeing deliveries, and we anticipate two years of essentially no growth in capacity,” O’Leary stated. “If consumers face ongoing economic pressure over the next year or 18 months, that might turn out to be advantageous for us.”