Ryanair has expressed disappointment in its recent business performance, which has also led to investor dissatisfaction, resulting in a 17% drop in the airline’s stock following the release of its less-than-expected quarterly earnings report. The airline reported revenue of €3.6 billion ($4 billion), which is comparable to the same period last year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary acknowledged that while they are increasing passenger numbers, it requires significant effort to achieve this.
O’Leary noted that traffic had grown by 10%, reaching 55 million passengers, but emphasized that this growth is contingent on pricing strategies. He mentioned on the earnings call that the airline has had to aggressively stimulate fares and bookings. He expressed concern over disappointing close-in bookings, particularly leading into the peak months of July, August, and September.
Additionally, Ryanair is facing challenges from increased labor costs and has pointed fingers at Boeing for ongoing delivery delays, a longstanding issue for O’Leary. While he has supported Boeing after a mid-flight incident with a 737 Max 9 this year, he has repeatedly urged the manufacturer to resolve its issues.
Moreover, O’Leary indicated that Ryanair’s customers seem to be feeling the strain as the economic recovery from COVID-19 encounters hurdles, such as inflation and stagnating economic growth within the European Union. He suggested that reducing their fleet capacity might be beneficial, given these circumstances.
“I expect we will have less capacity in summer 2025 than originally planned due to Boeing’s delays, leading to two years of essentially no capacity growth,” O’Leary stated. “If consumer pressures persist over the next year to 18 months, being in this position might not be detrimental.”