Ryanair is expressing disappointment regarding its business performance, which has also left investors feeling dissatisfied. The stock of the Irish budget airline has dropped by 17% following a quarterly earnings report that fell short of expectations. Revenue remained stable at €3.6 billion ($4 billion) compared to the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary noted that although more passengers are utilizing their flights, achieving this has required considerable effort.
O’Leary highlighted strong traffic growth, with passenger numbers increasing by 10% to 55 million. However, he cautioned that this growth is contingent on pricing strategies. “We are having to repeatedly stimulate fares and bookings. The close-in fares and performance have been disappointing and significantly weaker than expected, especially leading into the peak months of July, August, and September,” he stated during the earnings call.
In addition to softer demand, Ryanair is grappling with increased labor costs and has attributed some shortcomings to Boeing’s ongoing delivery delays, which have been a longstanding frustration for O’Leary. While he has defended the company following an incident with a 737 Max 9 earlier this year, he continues to urge Boeing to improve its operations.
O’Leary pointed out that customers seem to be facing more challenges than during the initial stages of the COVID-19 recovery, suggesting that inflation and slowing economic growth are affecting consumers within the EU. He indicated that operating fewer aircraft might eventually benefit Ryanair.
“We will have less capacity for summer 2025 than we originally planned due to Boeing’s delivery issues, and we are facing two years of no capacity growth at all,” O’Leary said. “If consumers are under pressure for the next year or 18 months, that might not be the worst situation for us.”