Ryanair has expressed disappointment in its recent business performance, leading to 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 last year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary indicated that while more passengers are flying with Ryanair, it requires significant effort to maintain these numbers.
During a company earnings call, O’Leary noted a 10% growth in passenger traffic, totaling 55 million, but emphasized that this growth comes at a price. He explained that the company is compelled to continually stimulate fares and bookings, which have been disappointing, particularly leading into the peak travel months of July, August, and September.
In addition to softer demand, Ryanair is facing increased labor costs and has attributed some difficulties to Boeing’s ongoing delivery delays, a persistent frustration for O’Leary. While he has defended the airline after a mid-flight incident involving a 737 Max 9, he continues to urge Boeing to improve its operations.
O’Leary also mentioned that customers seem to be experiencing greater financial strain compared to the earlier phases of the COVID-19 recovery, with inflation and stagnating economic growth impacting individuals in the European Union. He suggested that operating fewer aircraft could actually benefit Ryanair in the current climate.
He projected that the airline would have less capacity in summer 2025 than initially planned due to Boeing’s delivery setbacks, predicting a two-year period of minimal capacity growth. O’Leary acknowledged that if consumer pressure persists over the next year to year and a half, this scenario may not be unfavorable for the airline.