Ryanair is expressing disappointment with its recent business performance, which has in turn frustrated investors. The budget airline’s stock has fallen by 17% following the release of a quarterly earnings report that was weaker than anticipated. The company’s revenue stood at €3.6 billion ($4 billion), roughly unchanged from last year, but profits were nearly halved to €336 million. CEO Michael O’Leary acknowledged that while the airline has succeeded in attracting more passengers, it has required significant effort to do so.
O’Leary noted that traffic growth is strong, increasing by 10% to 55 million passengers, but it comes at a cost. “We’re having to repeatedly stimulate fares and bookings,” he stated on the earnings call. He also mentioned that the bookings closer to the travel dates have been disappointing, particularly as the peak travel months of July, August, and September approach.
In addition to softer demand, Ryanair is facing rising labor costs and has pointed to Boeing’s delivery delays as another contributing factor. While O’Leary continues to support the company following incidents involving the 737 Max 9, he has urged Boeing to resolve its operational issues.
Moreover, O’Leary indicated that customers may be feeling the effects of inflation and sluggish economic growth in the European Union more acutely than they did earlier in the recovery from the COVID-19 pandemic. He suggested that reducing the number of aircraft available might ultimately benefit Ryanair: “We will have less capacity into summer 2025 than we initially planned, and we’re entering a period of essentially no capacity growth,” he said. “If consumers are under pressure in the next year or 18 months, that might not be the worst situation to be in.”