Ryanair is facing disappointment in its recent business performance, leading to a 17% drop in its stock following a quarterly earnings report that fell short of expectations. The Irish low-cost airline reported revenue of €3.6 billion ($4 billion), maintaining the same level as the previous year; however, profits plummeted nearly 50% to €336 million. CEO Michael O’Leary stated that while the airline is successfully attracting more passengers—up 10% to 55 million—it’s becoming increasingly challenging to do so profitably.
During the earnings call, O’Leary emphasized the necessity of stimulating fare rates and bookings. He noted that bookings close to departure have been disappointing, particularly as July, August, and September, key travel months, approach.
In addition to lower demand, Ryanair is contending with rising labor costs and continues to express frustration over delays in aircraft deliveries from Boeing. Despite past incidents, O’Leary has remained supportive of the company but has consistently urged Boeing to improve its performance.
He also highlighted that customers seem to be feeling the effects of prolonged inflation and stagnating economic growth in the European Union. This situation could potentially benefit Ryanair, as they are expected to operate with less capacity in the summer of 2025 than initially planned due to the ongoing delays in Boeing deliveries.
O’Leary suggested that a reduction in capacity might not be unfavorable if consumer pressure continues for the next year or 18 months.