Ryanair has expressed disappointment over its recent business performance, leading to a 17% decline in its stock value following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenues of €3.6 billion (approximately $4 billion), remaining stable compared to the previous year. However, profits nearly dropped by half to €336 million. CEO Michael O’Leary indicated that while more passengers are flying with Ryanair, the airline has been forced to work harder to achieve this growth.
During the earnings call, O’Leary noted a 10% increase in passenger traffic, totaling 55 million, but stressed that this growth comes at a cost. “We’re having to repeatedly stimulate fares and bookings. Close-in fares and performance have been disappointing, especially as we approach the peak months of July, August, and September,” he stated.
In addition to softer demand, Ryanair faces rising labor costs and has attributed some challenges to delays from Boeing, which have long been a source of frustration for O’Leary. Despite the turbulence caused by a 737 Max 9 incident earlier this year, he has been critical of Boeing’s performance for years.
O’Leary further noted that customers seem to be feeling the pressure as economic factors, such as inflation and stagnant growth, start to take a toll in the European Union. This situation may lead Ryanair to reduce capacity, which he suggested could ultimately benefit the airline in the coming years.
“We will have less capacity into summer 2025 than originally scheduled with our Boeing deliveries, leading to a period of essentially no growth in capacity,” O’Leary explained. “If consumers are going to experience financial pressure for the next year or 18 months, being in a position of limited capacity might not be the worst scenario for us.”