Ryanair is facing challenges in its business performance, resulting in a 17% drop in its stock value following a quarterly earnings report that came in below expectations. The Irish budget airline reported a revenue of €3.6 billion ($4 billion), which is largely unchanged from the previous year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the airline must exert significant effort to attract them.
Despite strong traffic growth, which saw an increase of 10% to 55 million passengers, O’Leary emphasized that this growth comes at a cost, stating, “We’re having to repeatedly stimulate fares and bookings.” He expressed disappointment over close-in bookings, which have been weaker than anticipated leading into the peak months of July, August, and September.
Additionally, Ryanair is grappling with rising labor costs and the impact of Boeing’s delivery delays, a recurring issue for O’Leary. While he has supported the company following a mid-flight incident involving a 737 Max 9, he has been vocal about the need for Boeing to improve its delivery timelines.
O’Leary also mentioned that Ryanair’s customers seem to be experiencing more financial strain compared to the initial phase of the COVID-19 recovery, with inflation and slowing economic growth in the European Union contributing to this pressure. He indicated that the airline would have less capacity for summer 2025 than originally planned due to Boeing’s delays, suggesting that a period of no capacity growth might not be detrimental if consumer pressure continues for the next year or 18 months.