Ryanair is expressing disappointment with its recent business performance, prompting investors to share the same sentiment. The Irish budget airline’s stock has fallen by 17% following the release of a quarterly earnings report that was weaker than anticipated. Revenue for the period was reported at €3.6 billion ($4 billion), which is largely unchanged from the previous year. However, profits took a significant hit, plummeting almost 50% to €336 million.
CEO Michael O’Leary noted that while the airline is successfully increasing the number of passengers flying with them—up 10% to 55 million—this growth is largely dependent on pricing strategies. He remarked during the earnings call that the company is having to make considerable efforts to stimulate fares and bookings, with recent performance in that area falling short of expectations, especially leading into the peak months of July, August, and September.
In addition to facing reduced demand, Ryanair is also contending with rising labor costs and has attributed some issues to delays in aircraft deliveries from Boeing, a longstanding challenge for O’Leary. Despite a recent incident involving a 737 Max 9, he has maintained his support for the company but has consistently urged Boeing to improve its delivery performance.
O’Leary highlighted that customers seem to be feeling the pressure from ongoing inflation and stagnant economic growth within the European Union. He suggested that having a reduced fleet may ultimately benefit Ryanair in light of these challenges.
Looking ahead, O’Leary indicated that Ryanair would have a smaller capacity for the summer of 2025 than initially planned due to the delivery delays from Boeing. He stated, “If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst place to be.”