Ryanair is facing challenges in its business performance, leading to disappointment among investors. The Irish budget airline’s stock has fallen by 17% following the release of a quarterly earnings report that was weaker than anticipated. The company’s revenue remained stable at €3.6 billion ($4 billion) compared to last year, but profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, it requires significant efforts to attract them.
During the earnings call, O’Leary highlighted that traffic growth surged by 10%, reaching 55 million passengers, but emphasized that this growth comes at a cost. He pointed out that the need to frequently adjust fares and boost bookings has been challenging, particularly with disappointing close-in bookings leading into the peak summer months of July, August, and September.
In addition to softer demand, Ryanair is grappling with rising labor costs and has expressed frustration with Boeing’s delivery delays, an ongoing issue for O’Leary. Despite previously defending Boeing after a mid-flight incident involving a 737 Max 9, O’Leary has consistently urged the manufacturer to improve its operations.
The CEO also indicated that Ryanair’s customers seem to be experiencing more financial pressure compared to earlier in the COVID-19 economic recovery. Reports suggest that ongoing inflation and stagnant economic growth are affecting consumers in the European Union. As a result, O’Leary mentioned that operating fewer aircraft might ultimately benefit Ryanair.
He stated, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all. If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst place to be.”