Ryanair is expressing disappointment in its recent business performance, with investors sharing similar sentiments. The Irish budget airline’s stock has fallen by 17% following the release of a quarterly earnings report that was weaker than anticipated. Revenue remained steady at €3.6 billion ($4 billion) compared to last year, but profits saw a significant decline, nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, the airline has had to work harder to attract them.
O’Leary emphasized that traffic growth is robust, with passenger numbers rising by 10% to 55 million. However, he acknowledged that this growth comes at a cost, stating, “We’re having to repeatedly stimulate fares and bookings.” He also highlighted that the low fares and performance in close-in bookings have been disappointing, particularly leading into the peak travel months of July, August, and September.
In addition to softer demand, Ryanair is contending with increased labor costs, and O’Leary has pointed fingers at Boeing for its ongoing delays in aircraft deliveries, which have long frustrated him. Despite previous incidents, such as a mid-flight malfunction on a 737 Max 9 this year, O’Leary continues to urge Boeing to improve its operations.
He informed investors that customers appear to be facing more financial pressures than during the initial recovery from the COVID-19 pandemic. Reports indicate that years of inflation and stagnating economic growth are beginning to affect consumers in the European Union. In light of this, he suggested that operating fewer jets might ultimately benefit Ryanair.
O’Leary mentioned, “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.” He added that if consumer spending remains under pressure for the next year or 18 months, this situation may not be the worst outcome for the airline.