Ryanair has expressed disappointment regarding its recent business performance, leading to a 17% decrease in its stock price following a quarterly earnings report that fell short of expectations. The Irish low-cost airline reported revenue of €3.6 billion ($4 billion), which mirror last year’s figures, while profits plummeted almost 50% to €336 million. CEO Michael O’Leary noted the airline is managing to attract more passengers, but emphasized that it requires significant effort.
“Passenger traffic has increased by 10% to 55 million, but this growth comes at a cost,” O’Leary stated during the earnings call. He acknowledged that the company has needed to continually lower fares to stimulate bookings, which has been disappointing—especially in the lead-up to the busy summer months of July, August, and September.
Ryanair is facing challenges not only from diminishing demand but also from rising labor costs. Additionally, O’Leary assigned some blame to Boeing’s ongoing delivery delays, a persistent issue for the airline. Despite a recent incident involving a 737 Max 9 mid-flight issue, O’Leary has maintained his support for Boeing while urging the company to improve its operations.
Moreover, O’Leary indicated that Ryanair’s customers seem to be feeling the economic effects of ongoing inflation and stagnant growth in the European Union more acutely than during the initial recovery phase from the COVID-19 pandemic. Consequently, he suggested that operating with a smaller number of aircraft could ultimately benefit Ryanair.
“We will have less capacity for the summer of 2025 than initially expected due to Boeing’s delivery schedule, and we anticipate two years with little to no capacity growth,” O’Leary explained. “If consumers remain under financial pressure for the next 12 to 18 months, this might actually position us favorably.”