Ryanair is expressing disappointment with its business performance, which has led to investor dissatisfaction as well. The Irish low-cost airline’s stock has dropped 17% following the release of a quarterly earnings report that fell short of expectations. The company’s revenue stood at €3.6 billion ($4 billion), roughly unchanged from the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the airline is making significant efforts to attract them.
O’Leary highlighted that passenger traffic grew by 10% to 55 million. However, he emphasized that this growth is contingent on pricing strategies, stating, “We’re having to repeatedly stimulate fares and bookings.” He remarked that recent low fares and performance have been disappointing, particularly as the airline approaches the peak travel months of July, August, and September.
In addition to declining demand, Ryanair is facing increased labor costs and attributed some challenges to Boeing’s delivery delays, a longstanding issue for O’Leary. Despite past incidents, O’Leary has continued to support Boeing but has urged the company to improve its performance.
Moreover, O’Leary noted that Ryanair’s customers seem to be feeling more economic pressure than they did during the initial phases of the COVID-19 recovery. He mentioned that persistent inflation and slowing economic growth in the European Union may adversely affect consumer spending. Consequently, he suggested that a reduction in the airline’s capacity might be beneficial, saying, “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.” He concluded that if consumers face financial constraints over the next year or 18 months, it could position Ryanair advantageously.