Ryanair has expressed disappointment over its recent business performance, leading to a 17% drop in its stock following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), which remained stable compared to the previous year. However, profits saw a significant decline, nearly halving to €336 million. CEO Michael O’Leary mentioned that while the number of passengers flying with Ryanair has increased, achieving this growth has required considerable effort.
During the earnings call, O’Leary noted that passenger traffic rose by 10% to 55 million but emphasized that this growth comes at a cost. He pointed out that the airline has been forced to continuously stimulate fare prices and bookings, particularly observing disappointing performance in close-in bookings as the peak summer months approach.
Additionally, the airline is grappling with rising labor costs and has partially attributed its challenges to delays in aircraft deliveries from Boeing, a long-standing issue for O’Leary. Although he has defended the company in light of recent incidents involving the 737 Max 9, he has continually urged Boeing to improve its operations.
Moreover, O’Leary highlighted that customers may be feeling the pressure of rising inflation and sluggish economic growth in the European Union, suggesting that this could lead to a reduction in flight capacities. He indicated that Ryanair expects to operate with less capacity in the summer of 2025 due to delayed Boeing deliveries and anticipates a period of stagnation in capacity growth over the next two years. He noted that if consumer spending remains under pressure during this time, it could be a beneficial position for Ryanair.