Ryanair is expressing disappointment with its business performance, which has led to investor discontent as well. The Irish low-cost airline’s stock has fallen by 17% following the release of a quarterly earnings report that was weaker than anticipated. The company reported revenues of €3.6 billion ($4 billion), consistent with last year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while passenger numbers are increasing, the airline has had to exert significant effort to achieve this growth.
O’Leary highlighted a 10% increase in passenger traffic, totaling 55 million, but emphasized that this growth comes at a cost. “We are having to repeatedly stimulate fares and bookings, and the performance of close-in bookings has been disappointing, especially leading into the peak months of July, August, and September,” he stated during the earnings call.
The airline is facing softer demand along with rising labor costs and has partly attributed its challenges to delays in aircraft deliveries from Boeing, a longstanding issue for O’Leary. Despite past incidents, such as the mid-flight door malfunction on a 737 Max 9, he has continued to push Boeing for improvements.
Moreover, O’Leary indicated that Ryanair’s customers seem to be facing more challenges than they did during the initial recovery from the COVID-19 pandemic. Reports suggest that inflation and sluggish economic growth in the European Union are beginning to impact consumer behavior. This situation may lead to a strategic advantage for Ryanair, as O’Leary mentioned plans for reduced capacity going into summer 2025 due to slower-than-expected aircraft deliveries. He remarked, “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.”