Ryanair has expressed disappointment over its recent business performance, leading to a 17% decline in its stock following the release of a quarterly earnings report that fell short of expectations. The Irish low-cost airline reported revenue of €3.6 billion ($4 billion), roughly the same as the previous year, but profits plummeted to €336 million, nearly half of what they were. CEO Michael O’Leary noted that while they are managing to attract more passengers—up 10% to 55 million—this comes at a cost, as the company is forced to continually reduce fares to stimulate demand.
He explained during the earnings call that although passenger traffic is increasing, the close-in fares and bookings have been disappointing, particularly as the peak travel months of July, August, and September approach.
In addition to the softening demand, Ryanair is facing rising labor costs and continues to express frustration over delays in Boeing aircraft deliveries. O’Leary emphasized the need for Boeing to improve its operations, despite having defended the company following recent mid-flight issues with its 737 Max 9.
O’Leary also pointed out that Ryanair’s customers may be feeling more economic pressure now compared to the initial stages of recovery from the COVID-19 pandemic. Years of inflation and sluggish growth in the European Union are likely impacting consumers. He indicated that operating fewer aircraft in the near future could inadvertently benefit Ryanair.
The company is projecting reduced capacity for the summer of 2025 compared to earlier schedules due to Boeing delivery issues, and O’Leary suggested that maintaining limited growth over the next one to one and a half years might serve the airline well amid ongoing economic challenges.