Ryanair is expressing disappointment in its business performance, which has also led to investor dissatisfaction. The stock of the Irish budget airline has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The company’s revenue remained stable at €3.6 billion ($4 billion), nearly the same as last year, but profits plummeted by nearly 50% to €336 million. CEO Michael O’Leary noted that while more passengers are flying with the airline, attracting them requires significant effort.
O’Leary highlighted that traffic growth is strong, with an increase of 10% to 55 million passengers, but he emphasized that this growth comes at a cost. “We’re having to repeatedly stimulate fares and bookings. And the close-in fares and performance, the close-in bookings has been disappointing and materially weaker than we’ve expected,” he stated during the company’s earnings call, particularly as they approach the peak travel months of July, August, and September.
In addition to weaker demand, Ryanair is facing rising labor costs and has consistently criticized Boeing for delivery delays, an ongoing issue for O’Leary. Although he has supported the company following a mid-flight incident with a 737 Max 9 earlier this year, he has urged Boeing to improve its operations.
O’Leary cautioned investors that Ryanair’s customers seem to be feeling more pressure than earlier in the economic recovery from the COVID-19 pandemic. Reports suggest that years of inflation and slowing economic growth are affecting consumer behavior in the European Union. As a result, he mentioned that operating with fewer aircraft could ultimately benefit Ryanair.
“We will have less capacity into summer 2025 than we originally scheduled with our Boeing delivery, and then we’re into two years of essentially no capacity growth at all,” O’Leary explained. “If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst position to be in.”