Ryanair is expressing dissatisfaction with its recent business performance, resulting in a 17% drop in its stock value following the release of a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), which remains stable compared to last year. However, profits plummeted nearly by half to €336 million. CEO Michael O’Leary noted that while more passengers are flying with the airline, the company is having to work harder to attract them.
O’Leary stated during the earnings call that passenger traffic has increased by 10% to 55 million, but this growth is heavily influenced by pricing strategies. He acknowledged that the need for fare stimulation and boosting bookings has continued, with disappointing performance in last-minute bookings leading into the peak travel months of July, August, and September.
Additionally, Ryanair is grappling with rising labor costs and has attributed some challenges to delays in aircraft deliveries from Boeing, which has been a point of contention for O’Leary. Despite having defended the airline after an incident involving a 737 Max 9, he has long urged Boeing to streamline its operations.
O’Leary also informed investors that customers seem to be feeling the strain more than they did earlier in the economic recovery from the COVID-19 pandemic. Reports suggest that persistent inflation and slow economic growth in the European Union are affecting consumers. As a result, Ryanair may operate fewer aircraft, which could be advantageous for the airline.
Looking ahead, O’Leary shared that the company will have reduced capacity in the summer of 2025 compared to its earlier Boeing delivery schedule, and there will likely be two years of minimal capacity growth. He noted that if consumers are under financial pressure over the next year or 18 months, this situation could be beneficial for Ryanair.