Ryanair is facing challenges in its business performance, leading to disappointment among investors. The Irish budget airline saw its stock drop by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenues of €3.6 billion ($4 billion), nearly identical to last year’s figures. However, profits plummeted by almost 50%, reaching €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the airline must work harder to attract them.
During a recent earnings call, O’Leary stated that traffic growth is robust, with a 10% increase to 55 million passengers, but this growth is heavily tied to pricing strategies. He expressed concern over disappointing close-in bookings as the peak months of July, August, and September approach.
In addition to weaker demand, Ryanair is grappling with increased labor costs and has attributed some of its difficulties to delays in aircraft deliveries from Boeing, a longstanding issue for O’Leary. Despite standing by the company after a mid-flight incident involving a 737 Max 9 earlier this year, he has long urged Boeing to improve its performance.
O’Leary also shared insights on the challenging economic climate in the European Union, where inflation and stagnating growth appear to be affecting consumer behavior more than during the initial recovery from the COVID-19 pandemic. He suggested that scaling back on jetliner capacity could benefit Ryanair, anticipating reduced aircraft availability for the summer of 2025 due to delivery issues. He commented that the lack of capacity growth over the next two years might position the airline favorably if consumer pressure persists.