Ryanair is facing disappointment with its business performance, which has in turn affected investor sentiment. The Irish low-cost airline saw its stock plummet by 17% following the release of a quarterly earnings report that fell short of expectations. The company’s revenue for the quarter was €3.6 billion ($4 billion), remaining relatively unchanged from the previous year. However, profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, it requires significant effort to achieve this.
O’Leary highlighted that passenger traffic is up by 10%, totaling 55 million, but emphasized that this growth comes at a cost. The airline is having to stimulate fares and bookings more than anticipated, particularly as recent booking performance has been disappointing as it approaches the peak travel months of July, August, and September.
In addition to softer demand, Ryanair is contending with increased labor costs and has expressed frustration over Boeing’s delivery delays, which have been a persistent concern for O’Leary. Despite recent technical issues with its aircraft, he has insisted that the airline remains committed to working with the manufacturer.
O’Leary also observed that consumers seem to be facing more strain compared to the initial stages of the economic recovery from the COVID-19 pandemic. As inflation and slowing economic growth impact the European Union, Ryanair may have to adjust its capacity plans. He indicated that the airline would operate fewer aircraft than initially scheduled for the summer of 2025, which might ultimately be a prudent move given the predicted consumer challenges over the next year to 18 months.