Ryanair has expressed disappointment with its business performance, leading to a 17% drop in its stock following the release of 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 the previous year. However, its profits nearly halved to €336 million. CEO Michael O’Leary noted that the airline is successfully attracting more passengers but is facing challenges in doing so efficiently.
O’Leary mentioned during the company’s earnings call that while traffic growth is robust, with a 10% increase to 55 million passengers, it comes at a cost. The airline has to continuously incentivize fares and bookings, particularly as close-in bookings have shown weaker performance than anticipated ahead of peak travel months.
In addition to lower demand, Ryanair is grappling with rising labor costs and has pointed to Boeing’s delivery delays as an ongoing issue. O’Leary, who has previously defended the airline after an incident involving a 737 Max 9, has long urged Boeing to resolve its delivery challenges.
The CEO indicated that consumers may be feeling the effects of inflation and slower economic growth in the European Union, potentially impacting travel plans. He suggested that operating fewer aircraft could be beneficial for Ryanair in the near future. O’Leary stated that the airline would have less capacity in the summer of 2025 than initially planned due to Boeing’s delays, leading to two years of little to no growth in capacity. He concluded that, should economic pressures persist for consumers over the next year or so, this approach might not be detrimental to the airline’s performance.