Ryanair has expressed disappointment regarding its recent business performance, reflecting a significant letdown for investors as well. The budget airline from Ireland has seen its stocks plummet by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), remaining stable compared to the previous year, but profits dropped nearly 50% to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, attracting them is becoming increasingly challenging.
During the earnings call, O’Leary highlighted that passenger traffic grew by 10% to 55 million, yet this growth comes at a price, necessitating frequent fare reductions and promotional bookings. He remarked that the near-term booking performance leading into the busy summer months of July, August, and September has been particularly disappointing.
The airline is contending with lower demand coupled with rising labor costs. O’Leary also pointed fingers at Boeing due to ongoing delays in aircraft deliveries, a long-standing issue for him. Despite standing by the company amid problems with the 737 Max 9 model earlier this year, he has consistently urged Boeing to improve its operations.
Furthermore, O’Leary noted that customer spending habits appear to be weakening as the economic repercussions of inflation and slow growth take hold across the European Union. He indicated that in light of this economic pressure, operating a smaller fleet could potentially benefit Ryanair in the long run.
He stated that Ryanair will have reduced capacity for the summer of 2025 compared to initial plans, which included Boeing deliveries. He added that the next two years may see virtually no growth in capacity. O’Leary concluded that being in this position could be advantageous, given the economic challenges consumers may face over the next 12 to 18 months.