Ryanair is expressing disappointment with its recent business performance, which has resulted in a 17% drop in its stock value following the release of a less-than-expected quarterly earnings report. The Irish low-cost airline reported revenue of €3.6 billion ($4 billion), roughly equivalent to last year’s figures, while profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that although more people are flying with Ryanair, it requires significant effort to maintain this level of business.
O’Leary highlighted that passenger traffic grew by 10% to reach 55 million travelers, but this growth is coming at a cost. He pointed out that the company has been forced to stimulate fares and bookings consistently, leading to disappointing short-term performance, especially as the peak travel months of July, August, and September approach.
In addition to declining demand, Ryanair is facing increased labor costs and has attributed some challenges to delays in Boeing’s aircraft deliveries, an ongoing issue for O’Leary. Despite this, he affirmed support for Boeing, even after a mid-flight incident involving a 737 Max 9 earlier this year, while also urging the manufacturer to improve its operations.
O’Leary acknowledged that customers seem to be feeling more economic pressure compared to the earlier stages of recovery from the COVID-19 pandemic. This increase in financial strain, stemming from years of inflation and slow economic growth in the European Union, could lead to a reduction in the number of aircraft Ryanair operates.
He mentioned that Ryanair will operate with less capacity in the summer of 2025 than previously planned due to delays in aircraft deliveries, which could extend into two years without any increase in capacity. O’Leary suggested that if consumer demand remains under pressure in the coming 12 to 18 months, this strategy might ultimately benefit the airline.