Ryanair is expressing dissatisfaction with its recent business performance, a sentiment echoed by its investors. The Irish low-cost airline’s stock has dropped 17% following the release of a quarterly earnings report that fell short of expectations. The company’s revenue stood at €3.6 billion ($4 billion), nearly unchanged from the prior year. However, profits plummeted to €336 million, nearly half of what they were previously. CEO Michael O’Leary noted a significant increase in passenger traffic, which rose 10% to 55 million, but stressed that achieving this growth has come at a high cost.
O’Leary emphasized during the earnings call that while the growth in passengers is promising, it is not sustainable without aggressive fare promotions. He acknowledged that both the last-minute fares and overall performance have not met expectations, particularly as the company approaches its busiest months of July, August, and September.
In addition to declining demand, Ryanair is grappling with rising labor costs and has attributed some of the challenges to ongoing delays in Boeing aircraft deliveries. O’Leary has previously expressed frustration with Boeing, especially following a mid-flight incident this year involving a 737 Max 9.
Moreover, he indicated that Ryanair’s customers seem to be feeling the effects of inflation and sluggish economic growth within the European Union more acutely than in the initial stages of the post-COVID recovery. Faced with these challenges, O’Leary suggested that operating with a reduced number of aircraft might ultimately benefit Ryanair in the long run.
He noted, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all. If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst place to be.”