Ryanair is expressing dissatisfaction with its recent business performance, and this sentiment is echoed by discontent among its investors. The stock of the Irish budget airline has plummeted by 17% following a quarterly earnings report that fell short of expectations. Revenue reached €3.6 billion ($4 billion), which is comparable to the previous year, but profits nearly halved to €336 million. CEO Michael O’Leary noted that while they are attracting more passengers—seeing a 10% increase to 55 million—growing traffic comes at a cost. He stated during the earnings call, “We’re having to repeatedly stimulate fares and bookings,” adding that close-in fares and bookings have been disappointing, especially as they approach peak travel months.
In addition to lower demand, Ryanair is facing rising labor costs and has attributed some challenges to Boeing’s ongoing delivery delays, a persistent issue for O’Leary. Despite standing by the company after a mid-flight incident involving a 737 Max 9 this year, he has long urged Boeing to improve their operations.
O’Leary also indicated that customers appear to be feeling the impact of economic pressures more acutely than during the initial phases of the COVID-19 recovery. According to reports, years of inflation and slow economic growth in the European Union are affecting consumer spending. Given this situation, he suggested that operating with a reduced number of aircraft could be advantageous for Ryanair moving forward.
He explained, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all.” O’Leary concluded by noting that if consumer pressure persists for the next year or 18 months, this might not be the worst scenario for the airline.