Ryanair is expressing disappointment over its recent business performance, resulting in a 17% drop in its stock value following a quarterly earnings report that fell short of expectations. The Irish budget airline reported a revenue of €3.6 billion ($4 billion), which remains flat compared to last year, while profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that although the company is successfully increasing passenger numbers—rising by 10% to 55 million—this growth is coming at a significant cost.
During an earnings call, O’Leary stated, “Traffic growth is strong, but it’s only strong at a price,” highlighting the ongoing need to stimulate fares and bookings. He pointed out that recent close-in bookings were disappointing, particularly as the peak travel months of July, August, and September approach.
In addition to waning demand, Ryanair is grappling with elevated labor costs and has attributed some challenges to ongoing delays in aircraft deliveries from Boeing. Despite having supported Boeing after a mid-flight issue with a 737 Max 9, O’Leary has been vocal in urging the manufacturer to improve its operations.
O’Leary also mentioned that customers appear to be experiencing more financial pressure now compared to the early days of the COVID-19 recovery, as prolonged inflation and stagnant economic growth begin to impact consumers in the European Union. He suggested that operating fewer aircraft could ultimately benefit Ryanair in this context.
Looking ahead, O’Leary stated, “We will have less capacity into summer 2025 than we originally scheduled with our Boeing delivery, and then we’re into two years of essentially no capacity growth at all.” He remarked that if consumer pressures persist over the next year to 18 months, reducing capacity might turn out to be advantageous for the airline.