Ryanair has expressed disappointment with its recent business performance, leading to a 17% drop in its stock price following a lackluster quarterly earnings report. The Irish budget airline reported revenue of €3.6 billion ($4 billion), flat compared to the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary noted that although more passengers are flying with Ryanair, the airline is facing challenges in attracting customers.
During the company’s earnings call, O’Leary highlighted a 10% increase in passenger traffic to 55 million but acknowledged that this growth is only achievable at discounted prices. He emphasized that the airline is having to continually stimulate fares and bookings, particularly as the demand for close-in fares has been disappointing as peak months of July, August, and September approach.
In addition to weaker demand, Ryanair is contending with rising labor costs and ongoing delivery delays from Boeing, a recurring issue for O’Leary. Despite standing by Boeing after a mid-flight incident with a 737 Max 9, he has consistently urged the manufacturer to improve its operations.
Moreover, O’Leary indicated that customers seem to be facing more economic challenges than in the early stages of the pandemic recovery. Reports suggest that years of inflation and slowing economic growth are impacting consumers across the European Union. In light of this, O’Leary believes that a reduction in aircraft capacity might actually benefit Ryanair.
He stated, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing delivery, and then, we’re into two years of essentially no capacity growth at all. If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst place to be.”