Ryanair has expressed disappointment with its recent business performance, and this sentiment is echoed by its investors as the airline’s stock has fallen by 17%. The Irish low-cost carrier released a quarterly earnings report that did not meet expectations, with revenues remaining flat at €3.6 billion ($4 billion) compared to the previous year. However, profits have sharply decreased by nearly half to €336 million. CEO Michael O’Leary noted that while passenger numbers have increased by 10% to 55 million, the airline is facing challenges in achieving this growth.
O’Leary mentioned during the earnings call that traffic growth comes at a cost, as the company has been compelled to stimulate ticket fares and bookings. He highlighted that the performance of close-in bookings has been disappointing, particularly leading into the busy summer months of July, August, and September.
In addition to weaker demand, Ryanair is also grappling with rising labor costs and has attributed some difficulty to Boeing’s ongoing delivery delays. O’Leary has consistently urged the aircraft manufacturer to improve its reliability, despite supporting the company after a recent incident involving a 737 Max 9.
Furthermore, he indicated that Ryanair’s customers are showing signs of strain due to inflation and stagnant economic growth in the European Union since the COVID-19 pandemic. O’Leary noted that the airline plans to operate fewer aircraft in summer 2025 than originally expected and anticipates two years of minimal capacity growth. He suggested that this might benefit the company if consumers continue to feel economic pressure in the coming months.