Ryanair is facing disappointment in its operational results, reflecting investor sentiment as the budget airline’s stock has declined by 17% following a quarterly earnings report that fell short of expectations. The company’s revenue remained stable at €3.6 billion ($4 billion), roughly the same compared to the previous year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while they are successfully increasing passenger numbers—up 10% to 55 million—this growth comes at a cost, as they need to significantly stimulate fares and bookings.
O’Leary pointed out that bookings for the upcoming peak months of July, August, and September have been disappointingly lower than anticipated. In addition to weakened demand, rising labor costs have compounded the airline’s challenges, and O’Leary attributed some of the difficulties to delivery delays from Boeing, an ongoing frustration for him.
He also remarked that Ryanair’s customers are feeling the strain more than they did in the initial phases of economic recovery from COVID-19, with years of inflation and sluggish growth negatively impacting consumers in the European Union. Consequently, O’Leary suggested that it might benefit the airline to have reduced capacity moving forward. He indicated that Ryanair expects to operate with less capacity in summer 2025 than initially planned due to Boeing’s delivery issues, followed by two years with virtually no growth in capacity. This could prove advantageous if consumer pressure persists over the next year to 18 months.