Ryanair has expressed disappointment regarding its recent business performance, which in turn has led to investor dissatisfaction as well. The Irish budget airline’s stock has fallen by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), which is roughly the same as the previous year, but profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, attracting them has become increasingly challenging.
O’Leary highlighted that passenger traffic grew by 10%, reaching 55 million, yet emphasized that the growth is dependent on pricing strategies. He stated during the earnings call that the airline has had to constantly incentivize fares and bookings, and noted that recent fare performance and close-in bookings have been disappointing, especially as the peak months of July, August, and September approach.
In addition to weaker demand, Ryanair is grappling with higher labor costs and continues to be affected by delivery delays from Boeing, a recurring issue for O’Leary. Despite maintaining confidence in the company after a mid-flight incident involving a 737 Max 9 earlier this year, he has long urged Boeing to resolve its operational issues.
O’Leary observed that it seems the airline’s customers are facing increased challenges compared to the early recovery period from the COVID-19 pandemic, with reports indicating that inflation and declining economic growth are impacting consumers in the European Union. This situation might lead to Ryanair operating fewer aircraft, which O’Leary sees as potentially beneficial.
He mentioned that the airline will have reduced capacity in the summer of 2025 compared to earlier schedules due to Boeing delivery setbacks, and it anticipates two years of negligible capacity growth. O’Leary concluded that if consumers remain under financial pressure for the upcoming year to year and a half, operating with less capacity could prove advantageous for Ryanair.