Ryanair has expressed disappointment over its business performance, leading to a similar sentiment among investors. Following a quarterly earnings report that fell short of expectations, the Irish budget airline’s stock has plummeted by 17%. While revenue remained stable at €3.6 billion ($4 billion) compared to last year, profits nearly halved to €336 million. CEO Michael O’Leary noted that although more passengers are flying with Ryanair, the airline is facing significant challenges in attracting them.
During the earnings call, O’Leary highlighted that passenger traffic has increased by 10% to 55 million, but added that achieving this growth has come at a cost. “We’re having to repeatedly stimulate fares and bookings,” he stated, while expressing concern over disappointing close-in bookings, especially as the peak travel months of July, August, and September approach.
In addition to diminished demand, Ryanair is contending with rising labor expenses and has partially attributed its struggles to Boeing’s ongoing delivery delays, which remain a persistent issue for O’Leary. Although he has repeatedly urged Boeing to improve its operations, he is also coping with the fallout from an incident earlier this year involving a 737 Max 9.
O’Leary also indicated that Ryanair’s customers appear to be feeling the effects of prolonged inflation and slow economic growth in the European Union, which may lead to a decrease in demand. He mentioned that the airline will operate with reduced capacity going into summer 2025 compared to prior schedules due to the delays with Boeing. “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,” he concluded.