Ryanair is expressing disappointment over its recent business performance, a sentiment echoed by its investors. The Irish low-cost airline has seen a 17% drop in its stock price following the release of a quarterly earnings report that fell short of expectations. The airline’s revenue stood at €3.6 billion ($4 billion), roughly matching last year’s figures, but profits fell sharply to €336 million. CEO Michael O’Leary noted that while passenger traffic increased by 10% to 55 million, it comes at a cost, requiring significant fare stimulation and aggressive booking strategies.
In his earnings call, O’Leary highlighted challenges such as disappointing close-in fares and weaker-than-expected booking performance leading into the busy summer months of July, August, and September. Additionally, the company is contending with rising labor expenses and has attributed some difficulties to delays in aircraft deliveries from Boeing, a point of frustration for O’Leary.
Despite these challenges, he indicated that customers might be facing tougher conditions than during the initial recovery from the COVID-19 pandemic. Reports suggest that prolonged inflation and stagnant economic growth in the European Union may be affecting consumer behavior. Consequently, O’Leary suggested that operating with a reduced fleet might actually benefit the airline under current circumstances.
“We will have less capacity into summer 2025 than we originally scheduled with our Boeing deliveries, and we expect essentially no capacity growth for the next two years,” O’Leary stated. He added that if consumer pressures persist over the next 12 to 18 months, this could position Ryanair favorably in the market.