Ryanair is expressing disappointment with its recent business performance, leading to investor dissatisfaction as well. The Irish low-cost airline has seen its stock price decrease by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), nearly unchanged from the previous year, but profits plummeted by almost half to €336 million. CEO Michael O’Leary noted that while more passengers are choosing to fly with Ryanair, it requires significant effort to attract them.
O’Leary indicated during the earnings call that traffic growth is up by 10%, amounting to 55 million passengers, but this increase comes at a cost. He highlighted the necessity of stimulating fare prices and bookings, particularly pointing out disappointing trends in close-in fares and bookings, which were weaker than anticipated as the peak travel months of July, August, and September approach.
Additionally, Ryanair faces challenges from declining demand alongside rising labor costs, and O’Leary has cited Boeing’s delivery delays as a persistent issue that has affected the airline. Despite previously supporting Boeing amid concerns over the 737 Max 9 model, he has urged the manufacturer to improve its operations.
O’Leary also remarked that customers of Ryanair seem to be feeling more financial pressure compared to the early stages of the economic recovery from the COVID-19 pandemic. This pressure is being attributed to years of inflation and slowing economic growth within the European Union. He suggested that a reduction in the fleet’s capacity could be beneficial for Ryanair in the current market conditions.
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.” O’Leary added that given the potential financial struggles consumers may face over the next year to 18 months, maintaining lower capacity might not be detrimental for the airline.