Ryanair has expressed dissatisfaction with its recent business performance, leading to disappointment among investors as well. The Irish budget airline’s stock has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. Revenue remained flat at €3.6 billion ($4 billion) compared to the previous year, while profits experienced a significant decline, nearly halving to €336 million. CEO Michael O’Leary indicated that although more passengers are flying with Ryanair, it requires considerable effort to achieve this growth.
O’Leary noted on the earnings call that while traffic has increased by 10%, reaching 55 million passengers, this growth comes at a cost. “We are having to frequently stimulate fares and bookings. The performance of close-in bookings has been disappointing, particularly as we approach the peak months of July, August, and September,” he stated.
In addition to weaker demand, Ryanair is facing rising labor costs and has cited Boeing’s delivery delays as a contributing factor to its struggles. O’Leary has criticized Boeing in the past regarding these delays, which have been a persistent issue for the airline. Despite a recent mid-flight incident with a 737 Max 9, he continues to urge the manufacturer to resolve its operational challenges.
O’Leary also mentioned that consumers seem to be facing more financial pressures than earlier in the COVID-19 recovery phase, with years of inflation and slow economic growth impacting people in the European Union. He noted that reducing the number of aircraft in operation might ultimately benefit Ryanair. “We will have less capacity into summer 2025 than originally scheduled with our Boeing deliveries, and we anticipate two years of no capacity growth. If consumer pressure continues for the next year or 18 months, that may not be the worst scenario for us,” he remarked.