Ryanair has expressed disappointment over its recent business performance, leading to a 17% drop in its stock value following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), which is comparable to the same period last year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary acknowledged that while more passengers are flying with Ryanair, attracting them is becoming more challenging.
In a call with investors, O’Leary noted that passenger traffic increased by 10% to 55 million, but emphasized that this growth comes at a cost. He indicated that the airline has been forced to frequently lower fares and stimulate bookings, particularly as recent performance and close-in bookings have been weaker than anticipated during the critical summer months of July, August, and September.
Adding to the challenges of softer demand, Ryanair is also facing heightened labor costs and has pointed to ongoing delays in Boeing deliveries as a significant issue. Despite previously defending the aircraft manufacturer after a mid-flight incident with a 737 Max 9, O’Leary has expressed frustration with Boeing’s performance over the years.
As economic pressures from rising inflation and slowing growth in the European Union begin to affect customers more acutely, O’Leary suggested that operating with fewer aircraft might ultimately benefit Ryanair. He noted that the airline would have reduced capacity for summer 2025 compared to initial Boeing delivery schedules, which could position the company better if consumer spending remains under pressure over the coming months.