Ryanair is facing challenges in its business performance, leading to disappointment among investors. The Irish low-cost airline’s stock has fallen by 17% following a quarterly earnings report that came in below expectations. The company’s revenue remained stable at €3.6 billion ($4 billion), matching last year’s figures. However, profits saw a significant decline, nearly halving to €336 million. CEO Michael O’Leary noted that while the airline is attracting more passengers, it is struggling to maintain fare levels.
During the earnings call, O’Leary mentioned that traffic has increased by 10% to 55 million passengers, but this growth is heavily reliant on pricing strategies. He expressed concerns about weak demand for last-minute bookings, especially leading into the peak travel months of July, August, and September.
Additionally, Ryanair is grappling with rising labor costs and has attributed some of its struggles to delays in aircraft deliveries from Boeing. O’Leary has consistently criticized Boeing for its inefficiencies, notwithstanding his defense of the company after a recent mid-flight incident involving a 737 Max 9.
He also pointed out that Ryanair’s customers are feeling the impact of ongoing inflation and slowing economic growth in the European Union, which could affect travel behavior. Looking ahead, O’Leary indicated that the airline anticipates a reduced capacity for summer 2025 due to the Boeing delivery issues, suggesting that a period of no growth in capacity might not be detrimental if consumer spending remains under pressure over the next year to 18 months.