Ryanair has expressed disappointment in its recent business performance, mirrored by investor discontent as the airline’s stock has plummeted by 17%. The Irish budget airline reported quarterly earnings that fell short of expectations, revealing a revenue of €3.6 billion ($4 billion), roughly unchanged from the previous year. However, profits took a significant hit, nearly halving to €336 million.
Despite an increase in passenger numbers, which rose by 10% to 55 million, CEO Michael O’Leary noted that the company is facing challenges. “While traffic growth is strong, it comes at a cost,” he stated during the earnings call, emphasizing the need to stimulate fare prices and bookings. He highlighted that recent close-in bookings were disappointing, especially as the peak travel months of July, August, and September approach.
Additionally, Ryanair is grappling with rising labor costs and has pointed fingers at Boeing for ongoing delivery delays, a long-standing grievance for O’Leary. Despite an earlier incident involving a 737 Max 9, O’Leary has continued to pressure the aircraft manufacturer for improvements.
O’Leary further indicated that customers might be feeling the strain from prolonged inflation and stagnant economic growth in the European Union. He suggested that having a reduced number of jets could be advantageous for Ryanair if consumer pressures persist. “We will have less capacity entering summer 2025 than originally planned, leading to two years without capacity growth,” said O’Leary. “If consumers face challenges for the next year or 18 months, this might not be the worst scenario for us.”