Ryanair is expressing disappointment in its recent business performance, and this sentiment is echoed by investors, as the airline’s stock has fallen by 17% following the release of a less-than-expected quarterly earnings report. The airline reported revenues of €3.6 billion ($4 billion), nearly unchanged from the prior year, but profits dropped significantly to €336 million. CEO Michael O’Leary noted that while more passengers are flying, it requires considerable effort to achieve this.
O’Leary pointed out a 10% increase in passenger traffic, totaling 55 million, but emphasized that this growth comes at a cost. He mentioned that the airline has to continually stimulate fares and bookings, indicating disappointing performance in close-in bookings, especially as the peak summer months approach.
In addition to softening demand, Ryanair is grappling with rising labor costs and has expressed frustration over Boeing’s delivery delays, which have been a persistent issue for O’Leary. Despite previous challenges, he has maintained support for the company following a mid-flight incident involving a 737 Max 9 aircraft earlier this year, while urging Boeing to improve its operations.
O’Leary also remarked that Ryanair’s customers might be feeling the economic strain more acutely now than during the initial stages of the economic recovery from COVID-19. With rising inflation and sluggish growth in the European Union, O’Leary suggested that the company might actually benefit from scaling back operations over the next few years.
He stated, “We will have less capacity into summer 2025 than we are originally scheduled to have with our Boeing deliveries, and then, we are looking at 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.”