Ryanair is facing challenges with its business performance, leading to discontent among investors. The Irish low-cost airline’s stock has plummeted by 17% following the release of a quarterly earnings report that fell below expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), the same as last year, but profits nearly halved to €336 million. CEO Michael O’Leary noted an increase in passenger traffic, with 55 million travelers representing a 10% growth, but attributed this to the need for aggressive fare stimulation.
During the earnings call, O’Leary explained that while traffic numbers are strong, they come at a cost. He highlighted disappointing performance in close-in bookings, particularly leading into the peak travel months of July, August, and September. Additionally, the airline is grappling with increased labor costs and has pointed fingers at Boeing’s delivery delays, a recurring issue for O’Leary.
Despite a challenging environment, O’Leary indicated that Ryanair’s customers seem to be struggling more relative to the early recovery phase from COVID-19, exacerbated by inflation and dwindling economic growth across the European Union. This shift might lead to a reduction in Ryanair’s capacity in summer 2025, under the current Boeing delivery schedules. O’Leary mentioned that this could ultimately work to the airline’s advantage if consumer pressures persist over the next year and a half, suggesting that operating with fewer planes might be a favorable strategy.