Ryanair is facing disappointment in its business performance, leading to discontent among investors. The airline’s stock has decreased by 17% following the release of a quarterly earnings report that fell short of expectations. Revenue remained steady at €3.6 billion ($4 billion), mirroring last year’s figures. However, profits have nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, attracting these customers has required considerable effort.
During the earnings call, O’Leary highlighted a 10% growth in traffic, amounting to 55 million passengers, but emphasized that this growth comes at a cost. He remarked that there is a need to frequently stimulate fares and bookings, particularly as closer-in booking trends have been weaker than anticipated, especially in the critical months of July, August, and September.
In addition to waning demand, Ryanair is contending with rising labor costs and has attributed part of the challenges to delays in aircraft deliveries from Boeing, a persistent issue for O’Leary. Despite standing by the company after a mid-flight incident involving a 737 Max 9 earlier this year, he has repeatedly urged Boeing to improve its delivery schedule.
O’Leary expressed concerns that Ryanair’s customers might be experiencing more financial strain compared to earlier in the economic recovery from COVID-19, as inflation and slow economic growth are taking a toll on consumers within the European Union. In light of this, he suggested that operating fewer aircraft could potentially be beneficial for Ryanair.
“We will have less capacity heading into summer 2025 than we originally planned due to our Boeing deliveries, and we are facing two years of essentially no capacity growth,” O’Leary stated. “If the consumer is under pressure for the next year or 18 months, that might not be the worst scenario for us.”