Ryanair is expressing dissatisfaction with its recent business performance, and this sentiment is mirrored among its investors. The Irish low-cost airline’s shares have plummeted by 17% following the release of a quarterly earnings report that missed expectations. The company reported revenue of €3.6 billion ($4 billion), remaining stable compared to the previous year. However, profits nearly halved to €336 million. CEO Michael O’Leary indicated that while more passengers are using its services, attracting them is becoming increasingly challenging.
O’Leary noted during the earnings call that passenger traffic rose by 10%, reaching 55 million travelers. Despite this growth, he acknowledged that it comes at a cost, stating, “We are having to repeatedly stimulate fares and bookings.” He highlighted disappointing close-in fares and bookings, especially moving into the peak months of July, August, and September.
In addition to lower demand, Ryanair faces rising labor costs and has pointed to Boeing’s delivery delays as a contributing factor to its struggles. O’Leary has criticized Boeing for years over these delays, even while maintaining support for the company after an incident involving a 737 Max 9 aircraft earlier this year.
O’Leary also mentioned that Ryanair’s customers seem to be feeling the pressure more than at the beginning of the economic recovery following COVID-19. Years of inflation and stagnant economic growth appear to be impacting consumers in the European Union. In light of potential future demand challenges, O’Leary suggested that operating with a reduced fleet could ultimately be advantageous for Ryanair.
Looking ahead, he stated, “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 consumers continue to face financial pressures over the next 12 to 18 months, operating fewer aircraft might not be detrimental to the airline’s prospects.