Ryanair has expressed dissatisfaction with its recent business performance, leading to a 17% decline in its stock price following the release of a quarterly earnings report that fell short of expectations. The Irish low-cost airline reported a revenue of €3.6 billion ($4 billion), remaining roughly the same as last year. However, profits plummeted by nearly half, totaling €336 million. CEO Michael O’Leary noted that while the airline is attracting more passengers, achieving this growth requires significant effort.
Despite a 10% increase in traffic, reaching 55 million passengers, O’Leary indicated that this growth comes at a cost. He mentioned during the earnings call that the airline has been repeatedly stimulating fares and bookings, and highlighted disappointing performance and expectations for close-in bookings as the peak travel months of July, August, and September approach.
Additionally, the airline is facing challenges from rising labor costs and the ongoing issues with Boeing’s delivery delays, a point of frustration for O’Leary. Despite a recent in-flight incident with a 737 Max 9, he reiterated his long-standing criticism of Boeing’s reliability.
O’Leary also pointed out that customers seem to be experiencing more financial strain compared to the initial recovery period post-COVID-19. Reports suggest that persistent inflation and sluggish economic growth are impacting consumer spending in the European Union. In light of this, he indicated that operating with less capacity than originally planned for summer 2025 may, in fact, benefit Ryanair.
“We will have less capacity into summer 2025 than we were initially scheduled to have with our Boeing delivery, and we’re facing two years of essentially no capacity growth,” O’Leary stated. “If consumers remain under pressure for the next year or 18 months, being in this position might not be detrimental to us.”