Ryanair is expressing disappointment in its recent business performance, a sentiment echoed by investors as the airline’s stock has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The budget airline recorded revenue of €3.6 billion ($4 billion), which is similar to the previous year, but profits nearly halved to €336 million. CEO Michael O’Leary noted an increase in passenger numbers, yet emphasized that attracting more customers has required significant effort.
During an earnings call, O’Leary mentioned that while traffic has grown by 10% to 55 million passengers, this growth hinges on pricing strategies. He pointed out the company has had to stimulate fares and bookings more aggressively and highlighted disappointing close-in fares and bookings as they approach the peak travel months of July, August, and September.
In addition to softening demand, Ryanair is facing increased labor costs and has been affected by delays in aircraft deliveries from Boeing, a longstanding issue for O’Leary. Despite a recent incident involving a 737 Max 9, he has remained critical of Boeing’s efficiency.
O’Leary remarked that customers appear to be feeling the financial strain more than during the earlier stages of recovery from the COVID-19 pandemic. With signs of inflation and slowing economic growth impacting consumers in the European Union, he suggested that a reduction in the number of jets operated could ultimately benefit Ryanair.
“We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then we’re into two years of essentially no capacity growth at all,” O’Leary noted. He concluded that if consumer pressure continues over the next year to 18 months, this could position Ryanair favorably.