Ryanair is facing challenges in its business performance, leading to a 17% decline in its stock after the airline reported weaker-than-expected quarterly earnings. The Irish budget airline’s revenue stood at €3.6 billion ($4 billion), nearly unchanged from the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary acknowledged that while the number of passengers increased by 10% to 55 million, the airline is facing pressure to stimulate fares and bookings. He emphasized that the demand for flights has been below expectations, especially as the peak months of July, August, and September approach.
In addition to lower demand, the company is grappling with rising labor costs and ongoing delivery delays from Boeing, a recurring issue for O’Leary. Despite past incidents, including a mid-flight incident with a 737 Max 9, he continues to demand improvements from the manufacturer.
O’Leary also noted that European consumers seem to be feeling more economic pressure compared to earlier in the COVID-19 recovery phase. He suggested that operating fewer aircraft might benefit Ryanair amid these challenging conditions. Looking ahead, O’Leary projected that the airline would have less capacity for summer 2025 than anticipated due to Boeing delays, and warned that the market may face stagnation in capacity growth for the next two years. He admitted that given the consumer pressures expected over the next year to 18 months, this strategy might not be detrimental to the airline’s future.