Ryanair has expressed dissatisfaction with its recent business performance, leading to disappointment among its investors. The Irish budget airline’s stock has decreased by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenues of €3.6 billion ($4 billion), which is comparable to last year, but profits plummeted by nearly half to €336 million. CEO Michael O’Leary noted an increase in passenger numbers, but he emphasized that this growth comes with considerable effort.
O’Leary stated during the earnings call, “Traffic growth is strong, up 10% to 55 million passengers, but it’s only strong at a price.” He pointed out the need to continually stimulate fares and bookings, describing the recent performance of close-in bookings as disappointing, especially as the company approaches the typically busy months of July, August, and September.
In addition to softer demand, Ryanair is facing increased labor costs and has attributed some challenges to delays in aircraft deliveries from Boeing. O’Leary has been vocal about his frustrations regarding these delays while still supporting the planemaker after a mid-flight incident with a 737 Max 9 aircraft earlier this year.
O’Leary also shared concerns that customers may be experiencing more financial strain compared to the initial phase of the economic recovery from COVID-19. Reports indicate that ongoing inflation and slow economic growth in the European Union are starting to affect consumer spending. Consequently, O’Leary suggested that a reduction in the airline’s capacity could be beneficial in the long run.
He remarked, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’ll face two years of essentially no capacity growth at all. 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.”