Ryanair has expressed disappointment regarding its business performance, leading to dissatisfaction among investors, as the airline’s stock has plummeted by 17% following a quarterly earnings report that fell short of expectations. The Irish budget carrier reported revenue of €3.6 billion ($4 billion), virtually unchanged from the previous year, while profits saw a significant decline, dropping nearly 50% to €336 million. CEO Michael O’Leary acknowledged that while the airline is successfully increasing the number of passengers flying, it is also necessitating substantial effort to achieve this growth.
During the earnings call, O’Leary noted a 10% increase in passenger traffic, reaching 55 million, but highlighted that this growth comes at a cost. He indicated that the airline has had to continually stimulate fares and bookings, and that close-in booking performance has been disappointing, particularly leading into the peak travel months of July, August, and September.
Additionally, Ryanair is contending with weakened demand along with rising labor costs. O’Leary has attributed some challenges to delays in aircraft deliveries from Boeing, a longstanding issue for the airline. While he has supported the manufacturer following a mid-flight incident involving a 737 Max 9 earlier this year, he has been vocal about the need for Boeing to improve its operations.
O’Leary further informed investors that it appears customers are facing more difficulties compared to earlier in the economic recovery period following COVID-19. Reports suggest that years of inflation and slowing economic growth are impacting consumers in the European Union, leading O’Leary to consider that reduced capacity might benefit Ryanair in the long run.
“We will have less capacity into summer 2025 than initially planned due to Boeing delivery schedules, and we will experience essentially no capacity growth over the next two years,” O’Leary stated. “If consumers are likely to feel pressured for the next year or 18 months, being in this position may not be detrimental.”