Ryanair is experiencing disappointment in its business performance, which is echoed by investor sentiment as the airline’s stock has plummeted by 17% following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), remaining largely unchanged from the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary noted that, while more passengers are flying with Ryanair, the airline is exerting significant effort to attract them.
“Passenger growth is robust, increasing by 10% to 55 million travelers, but this surge is contingent on pricing,” O’Leary stated during the earnings call. He emphasized the need to continuously stimulate fares and bookings, with recent close-in bookings proving to be disappointing and considerably below expectations, particularly as the peak months of July, August, and September approach.
In addition to the softening demand, Ryanair is grappling with rising labor costs and has attributed some challenges to Boeing’s ongoing delivery delays, a longstanding issue that has frustrated O’Leary. Despite past support for Boeing after a mid-flight incident involving a 737 Max 9, he continues to urge the manufacturer to improve its operations.
O’Leary also mentioned that customers of the airline seem to be feeling the pressures of the economy more acutely compared to the earlier phases of recovery from the COVID-19 pandemic. According to reports, years of inflation and stagnant economic growth are now impacting consumers across the European Union, suggesting that a reduction in airline capacity could be advantageous for Ryanair.
He indicated that the airline will have lower capacity for summer 2025 than previously planned due to delays in Boeing deliveries, leading to two years with virtually no growth in capacity. “If consumers are facing financial strain over the next year or 18 months, being in this position may not be the worst outcome,” O’Leary concluded.