Ryanair has expressed dissatisfaction with its recent business performance, which has led to investor disappointment as well. The Irish low-cost airline’s stock has fallen by 17% following a quarterly earnings report that fell short of expectations. The company’s revenue remained steady at €3.6 billion (approximately $4 billion), similar to the previous year, but profits dropped significantly by nearly half, totaling €336 million. CEO Michael O’Leary noted that while the airline is successfully increasing the number of passengers, it requires considerable effort to achieve this.
During the earnings call, O’Leary mentioned that passenger traffic grew by 10%, reaching 55 million. However, he emphasized that this growth comes at a cost, as the company has had to continually stimulate booking rates and fares. He voiced concerns about disappointing close-in fares and bookings, especially as the company approaches its peak travel months of July, August, and September.
In addition to weaker demand, Ryanair is facing rising labor costs and has pointed fingers at Boeing for delivery delays, which have been a persistent issue for O’Leary. Despite this, he has remained supportive of the airline’s operations following a mid-flight incident involving a 737 Max 9 aircraft. O’Leary has long urged Boeing to improve its delivery timelines.
Moreover, he indicated that customers are reportedly feeling more financial pressure than they did during the early stages of the recovery from the COVID-19 pandemic. This financial strain may lead to reduced capacity for Ryanair, which O’Leary believes could ultimately be advantageous for the airline. He stated, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all.” He suggested that if consumer pressure persists over the next year to 18 months, this situation might not be detrimental for Ryanair.