Ryanair has expressed disappointment with its business performance, leading to a 17% decline in its stock after the release of a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), virtually unchanged from the previous year, while profits nearly halved to €336 million. CEO Michael O’Leary highlighted that although more passengers are flying with Ryanair—reaching 55 million, a 10% increase—this growth is being driven by aggressive fare stimulation.
O’Leary mentioned during an earnings call that the demand for close-in bookings has been particularly weak as the airline approaches peak months of July, August, and September. In addition to softer demand, Ryanair is facing rising labor costs and the ongoing challenge of Boeing’s delivery delays, which have long been a concern for the airline’s management.
Despite these difficulties, O’Leary noted that some of Ryanair’s customers are experiencing more financial strain compared to the early stages of the pandemic recovery. Reports indicate that years of inflation and slower economic growth are impacting consumers in the European Union. O’Leary suggested that running fewer aircraft might benefit Ryanair during this challenging economic period.
Looking ahead, he remarked that the airline will have reduced capacity for the summer of 2025 compared to what was initially planned due to Boeing’s delays, leading to two years with essentially no capacity growth. He acknowledged that if customer spending is expected to remain under pressure for the next 12 to 18 months, this could ultimately be a favorable situation for Ryanair.