Ryanair is facing challenges in its business performance, reflecting in a significant 17% drop in its stock value following the release of its quarterly earnings report, which fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), nearly unchanged from the previous year, but profits plummeted to €336 million.
CEO Michael O’Leary noted that while there is an increase in passenger traffic, which grew by 10% to 55 million, the company is finding it necessary to heavily stimulate fares and bookings to attract travelers. He indicated that demand for close-in bookings has been disappointing as the airline moves into peak travel months.
In addition to weaker demand, Ryanair is contending with rising labor costs and ongoing delivery delays from Boeing, which have been a persistent concern for O’Leary. He has been critical of Boeing for years, even as he supported the company following a mid-flight incident involving a 737 Max 9 earlier this year.
O’Leary also remarked that customers seem to be feeling the economic strain more acutely as years of inflation and slowing growth impact consumers in the European Union. In light of this, he suggested that operating fewer jets might ultimately benefit Ryanair’s strategy.
The company will have less capacity for the summer of 2025 than originally planned due to Boeing’s delivery setbacks, and O’Leary indicated this could be advantageous given the potential for consumer pressure in the coming 18 months.