Ryanair is facing challenges in its business performance, leading to disappointment among investors. The Irish budget airline has seen its stock drop by 17% following the release of its quarterly earnings report, which fell short of expectations. The company’s revenue remained flat at €3.6 billion ($4 billion), compared to the previous year, while profits plummeted by nearly half to €336 million. CEO Michael O’Leary acknowledged the increase in passenger numbers, stating that Ryanair is working hard to attract more flyers, but noted that this growth is reliant on discounted ticket prices.
During the earnings call, O’Leary pointed out that traffic increased by 10% to 55 million passengers, although he emphasized that the growth comes at a cost. He indicated that Ryanair has had to continuously stimulate bookings and fares, particularly as close-in bookings have fallen short of expectations for the peak travel months of July, August, and September.
In addition to decreased demand, Ryanair is grappling with rising labor costs and has attributed some of its issues to delays in aircraft deliveries from Boeing. This has been a longstanding frustration for O’Leary, who has previously urged the manufacturer to improve its performance.
Furthermore, O’Leary observed that Ryanair’s customers seem to be feeling the impact of recent economic pressures, as inflation and stagnant growth within the European Union have begun to affect consumer behavior. He suggested that operating a smaller fleet might benefit Ryanair amid these challenges.
O’Leary noted that the airline would have reduced capacity for the summer of 2025 compared to initial projections due to Boeing’s delays, and anticipated two years of minimal capacity growth. He remarked that if consumers continue to face financial pressures over the next 18 months, this situation might not necessarily be detrimental for Ryanair.