Ryanair has expressed disappointment in its recent business performance, leading to a 17% decline in its stock value following the release of a quarterly earnings report that fell short of expectations. The Irish low-cost airline reported revenues of €3.6 billion ($4 billion), which remained flat compared to the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary noted that while the airline is attracting more passengers, the competition for bookings has intensified.
During the earnings call, O’Leary highlighted a 10% increase in passenger traffic, bringing the total to 55 million. However, he emphasized that this growth comes at a cost, requiring continuous fare stimulation and efforts to encourage bookings, which have not lived up to expectations, especially as the peak travel months of July, August, and September approach.
In addition to weaker demand, Ryanair is grappling with rising labor costs and has also attributed some of its challenges to delays in aircraft deliveries from Boeing. O’Leary, who has been vocal about his frustrations with Boeing, acknowledged that customers are feeling more financially strained as economic pressures, such as inflation and stagnant growth in the European Union, start to take a toll.
Looking ahead, O’Leary indicated that the airline will operate with reduced capacity through the summer of 2025 compared to earlier plans, suggesting that this might be beneficial given the potential ongoing pressures on consumer spending in the coming year to 18 months.