Ryanair is expressing dissatisfaction with its business performance, which has led to disappointment among investors. The Irish low-cost airline has seen its stock plunge by 17% following a quarterly earnings report that fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), remaining flat compared to last year, while profits nearly halved to €336 million.
CEO Michael O’Leary noted that although there has been an increase in passenger traffic, up 10% to 55 million travelers, the airline is having to work hard to achieve these numbers. He mentioned in the earnings call that the strong traffic growth comes at a cost, as the airline is continually required to stimulate fares and bookings. Moreover, close-in fares and performance have been disappointing, particularly as the company approaches peak travel months in July, August, and September.
The airline is also facing challenges from higher labor costs and has attributed some issues to delays in aircraft deliveries from Boeing, a long-standing point of contention for O’Leary. He has consistently urged Boeing to improve its performance, despite standing by the company after a door plug incident on a 737 Max 9 earlier this year.
O’Leary indicated that Ryanair’s customers may be facing more difficulties now compared to the early stages of the economic recovery from the COVID-19 pandemic. According to reports, inflation and sluggish economic growth are taking a toll on consumers in the European Union. In light of these challenges, O’Leary suggested that reducing the number of aircraft could be beneficial for Ryanair.
He stated, “We will have less capacity for the summer of 2025 than originally planned due to our Boeing deliveries, and the next two years will see essentially no capacity growth.” O’Leary added that if consumers continue to face pressure over the next year or 18 months, this could put Ryanair in a favorable position.