Ryanair has expressed disappointment in its recent business performance, resulting in a 17% drop in its stock following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), which remained unchanged from the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary acknowledged that, although the airline is successfully increasing passenger numbers to 55 million — a 10% rise — this growth comes at a cost, as they are effectively having to cut fares to stimulate demand.
O’Leary noted on the company’s earnings call that the growth in traffic is strong but contingent on pricing strategies. He mentioned that demand for close-in bookings has been disappointing, especially leading into the peak summer months of July, August, and September.
The airline is also facing challenges from higher labor costs and delays in aircraft deliveries from Boeing, a situation that O’Leary has criticized for years. Despite some setbacks, he acknowledged that the airline’s customers are starting to feel financial pressures, as ongoing inflation and stagnant economic growth impact spending in the European Union.
Looking ahead, O’Leary indicated that Ryanair would operate with reduced capacity in the summer of 2025 compared to earlier projections, predicting two years of no capacity growth. He suggested that if consumer pressure continues over the next year and a half, this could position Ryanair favorably in a challenging market.