Ryanair is facing challenges in its business performance, which has led to dissatisfaction among investors. The stock of the Irish budget airline has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), nearly the same as the previous year, but profits plummeted by nearly 50% to €336 million. CEO Michael O’Leary noted that although more passengers are flying with Ryanair, the airline has had to exert significant effort to attract them.
He reported a strong traffic growth, with a 10% increase to 55 million passengers, but emphasized that this growth is heavily reliant on pricing strategies. O’Leary expressed concerns over disappointing close-in fares and bookings, particularly leading into the peak travel months of July, August, and September.
In addition to weaker demand, Ryanair contends with rising labor costs and has criticized Boeing for ongoing delivery delays, a persistent frustration for O’Leary. Despite past incidents, he has remained critical of Boeing’s performance and called for improvements.
Furthermore, O’Leary indicated that consumers seem to be feeling the effects of inflation and slow economic growth in the European Union more acutely than in the earlier recovery phase post-COVID-19. He suggested that a reduction in the number of aircraft operated might actually benefit Ryanair in this current economic climate.
Looking ahead, O’Leary stated that the airline would operate with less capacity in the summer of 2025 than initially planned due to delays in Boeing deliveries, leading to two years of stagnant capacity growth. He posited that if consumer pressures persist over the next year to 18 months, this might not be an unfavorable position for the airline.