Ryanair is expressing dissatisfaction with its recent business performance, reflecting the disappointment of its investors. The Irish budget airline has seen its stock drop by 17% following a quarterly earnings report that failed to meet expectations. The company reported revenue of €3.6 billion ($4 billion), which is nearly unchanged from last year, but its profits nearly halved to €336 million. CEO Michael O’Leary stated that while the number of passengers flying with Ryanair has increased by 10% to 55 million, achieving this growth has been challenging.
O’Leary emphasized during the earnings call that “Traffic growth is strong, but it’s only strong at a price.” He noted that the company has been compelled to offer incentives on fares and bookings frequently, as the close-in fares and bookings have underperformed expectations, particularly leading into the peak summer months.
Additionally, Ryanair is dealing with increased labor costs and has pointed to delays in aircraft deliveries from Boeing as a contributing factor, a longstanding issue that O’Leary has criticized. He reiterated his calls for Boeing to enhance its operational efficiency.
Moreover, O’Leary indicated that customers appear to be facing more challenges now compared to the early recovery phase following the COVID-19 pandemic. Reports suggest that rising inflation and slowing economic growth in the European Union are impacting consumer behavior. Consequently, O’Leary opined that reducing the number of aircraft in operation could be advantageous for Ryanair in the coming period.
He mentioned, “We will have less capacity into summer 2025 than we originally planned with our Boeing deliveries, and following that, we expect two years of no capacity growth.” O’Leary concluded that if consumers are under financial pressure for the next 12 to 18 months, this could position Ryanair favorably in the market.