Ryanair is expressing disappointment in its recent business performance, which has left investors feeling similarly let down. The Irish low-cost airline saw its stock decline by 17% following the release of a quarterly earnings report that fell short of expectations. Revenue remained stable at €3.6 billion ($4 billion) compared to the previous year, but profits nearly diminished by half to €336 million. CEO Michael O’Leary acknowledged that while they are successfully attracting more passengers, achieving this has required significant effort.
During the earnings call, O’Leary noted a 10% increase in passenger traffic, with 55 million travelers, but emphasized that this growth requires strategic pricing tactics. He mentioned disappointing close-in fares and weakened performance in booking ahead of the crucial summer months.
In addition to the drop in demand, Ryanair is also grappling with rising labor costs and ongoing delivery delays from Boeing, which has long frustrated O’Leary. Despite a recent incident involving a 737 Max 9, he has remained supportive of the manufacturer but has been vocal about the need for improvements.
O’Leary also indicated that Ryanair’s customers are facing more economic challenges now than they did at the outset of the recovery from the COVID-19 pandemic, with inflation and slow growth in the European Union starting to impact consumer behavior. He suggested that operating fewer aircraft might be advantageous for Ryanair moving forward.
Looking ahead, O’Leary stated that the airline would have less capacity for summer 2025 than initially planned due to Boeing’s delivery issues, and he projected a two-year period of stagnant capacity growth. He remarked that if consumers experience financial pressure in the coming year to 18 months, this strategy might be beneficial for the airline.