Ryanair is expressing disappointment in its business performance, which has led to corresponding dissatisfaction among investors. The stock of the Irish budget airline has plummeted by 17% following the release of a quarterly earnings report that fell short of expectations. While revenue remained stable at €3.6 billion ($4 billion), profit nearly halved, dropping to €336 million. CEO Michael O’Leary noted that while the airline is attracting more passengers, it is encountering significant challenges in doing so.
He reported a 10% increase in passenger traffic, amounting to 55 million travelers, but indicated that growth is coming at a cost. O’Leary remarked during the earnings call that stimulating fares and bookings has become necessary, and the close-in bookings are disappointing, particularly as the peak travel months of July, August, and September approach.
In addition to weaker demand, Ryanair is grappling with rising labor costs and has highlighted Boeing’s ongoing delivery delays as a contributory factor. Although O’Leary has supported the firm in light of past issues, he has long urged Boeing to improve its delivery performance.
Furthermore, he indicated that Ryanair’s customers appear to be facing increasing economic strain compared to earlier in the COVID-19 recovery period. According to reports, prolonged inflation and stagnant economic growth are beginning to impact consumers in the European Union. In light of this economic climate, O’Leary suggested that operating fewer aircraft might actually benefit the airline.
“We will have less capacity into summer 2025 than we initially planned due to Boeing’s delivery schedule, and for the subsequent two years, we anticipate no capacity growth,” O’Leary explained. He added that if the economic pressures on consumers persist over the next year or 18 months, this situation might ultimately prove advantageous for Ryanair.