Ryanair has expressed dissatisfaction with its recent business performance, leading to a 17% drop in its stock after reporting weaker-than-expected quarterly earnings. The Irish low-cost airline announced revenue of €3.6 billion ($4 billion), roughly consistent with the previous year. However, profits fell nearly 50% to €336 million. CEO Michael O’Leary noted that while the airline is successfully increasing passenger numbers, it requires significant effort to maintain that growth.
O’Leary stated during the earnings call that passenger traffic increased by 10% to 55 million, but it comes at a cost. He emphasized that the airline is having to stimulate fares and bookings repeatedly, reporting disappointing close-in bookings as the peak travel months of July, August, and September approach.
In addition to weakening demand, Ryanair faces rising labor costs and has criticized Boeing for delivery delays, which have been a continual challenge for the company. Despite an incident involving a 737 Max 9 mid-flight, O’Leary has urged Boeing to improve its operational performance.
He also observed that Ryanair’s customers seem to be experiencing more economic pressure compared to the early stages of the recovery from the COVID-19 pandemic, as inflation and sluggish economic growth impact consumer behavior in the European Union. This could potentially lead to a strategic advantage for Ryanair as it plans to reduce flight capacity.
O’Leary indicated that the airline anticipates having less capacity in the summer of 2025 than initially planned due to the delays in Boeing deliveries, with no capacity growth expected for two years. He suggested that if consumer pressure continues over the next year to 18 months, this situation might not be disadvantageous for Ryanair.