Ryanair is expressing dissatisfaction with its recent business performance, leading to disappointment among investors as well. The Irish budget airline has seen its stock price drop by 17% following a quarterly earnings report that fell below expectations. The company reported revenue of €3.6 billion ($4 billion), which is roughly on par with last year’s figures. However, profits have nearly halved, coming in at €336 million. CEO Michael O’Leary noted that while more passengers are using Ryanair’s services, the airline is facing challenges in attracting them.
O’Leary highlighted that traffic growth is strong, with a 10% increase to 55 million passengers, but it comes at a cost. He stated during the earnings call that, “We’re having to repeatedly stimulate fares and bookings,” and added that the recent close-in bookings have disappointed and weakened compared to expectations, especially as peak travel months of July, August, and September approach.
In addition to decreased demand, Ryanair is contending with rising labor costs and has attributed some issues to Boeing’s ongoing delivery delays, a point of frustration for O’Leary. Despite previous challenges, including a mid-flight incident with a 737 Max 9, O’Leary has continued to urge Boeing to rectify its performance.
O’Leary also indicated that consumers seem to be feeling more economic strain compared to the earlier stages of the pandemic recovery, with inflation and slow growth impacting spending in the European Union. He mentioned that Ryanair may benefit from reduced aircraft capacity, stating, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery,” and he believes this could be a favorable position given the anticipated pressure on consumers over the next year or more.