Ryanair is expressing disappointment over its recent business performance, leading to investor dissatisfaction as well. The Irish budget airline’s shares have dropped by 17% following a quarterly earnings report that fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), which remained steady compared to the previous year. However, profits plunged nearly 50%, amounting to €336 million. CEO Michael O’Leary indicated that while more passengers are flying with Ryanair, the airline is facing challenges in maintaining this trend.
O’Leary noted a traffic increase of 10%, reaching 55 million passengers, but emphasized that this growth comes at a cost. During the company’s earnings call, he remarked that they are continually having to incentivize fares and bookings, and that the performance of last-minute bookings has been disappointing, particularly leading into the busy months of July, August, and September.
The airline is grappling with softer demand, rising labor costs, and ongoing delivery delays from Boeing, a point of frustration for O’Leary. Despite previous issues, including a mid-flight incident involving a 737 Max 9, he has maintained his support for the planemaker while urging them to improve their operations.
Additionally, O’Leary observed that consumers in the European Union seem to be feeling the effects of prolonged inflation and stagnant economic growth more than they did during the initial COVID-19 recovery phases. He suggested that having a reduced fleet in the upcoming summer of 2025, resulting from Boeing’s delivery issues, could inadvertently benefit Ryanair if consumer spending remains constrained over the next year or so. O’Leary 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 concluded that this situation might not be unfavorable for the airline amidst an uncertain economic environment.