Ryanair is expressing dissatisfaction with its business results, and investors share this sentiment as the airline’s stock has plummeted by 17% following the release of a disappointing quarterly earnings report. The Irish low-cost carrier reported revenue of €3.6 billion ($4 billion), which is comparable to last year’s figures. However, profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the company is exerting considerable effort to achieve these numbers.
“Traffic growth is strong, with an increase of 10% to 55 million passengers, but it comes at a cost,” he stated during the earnings call. “We are having to continually stimulate fares and bookings, and the close-in fares and performance, as well as the close-in bookings, have been disappointing and significantly weaker than we anticipated, especially as we approach the peak summer months of July, August, and September.”
In addition to a decline in demand, the airline is facing rising labor costs and has pointed a finger at Boeing for its ongoing delivery delays, a persistent issue for O’Leary. While he has stood by the manufacturer following a mid-flight incident involving a 737 Max 9 earlier this year, he has frequently urged Boeing to improve its performance.
O’Leary informed investors that Ryanair’s customers seem to be experiencing more challenges than they did during the early recovery phase from the COVID-19 pandemic. Reports suggest that years of inflation and stagnated economic growth are beginning to impact consumers in the European Union. In this context, operating fewer aircraft might actually benefit Ryanair.
“We will have less capacity for the summer of 2025 than we originally planned with our Boeing deliveries, and we’ll face two years of effectively no capacity growth,” O’Leary explained. “If consumers are going to remain under pressure for the next year or 18 months, that might not be such a bad situation for us.”