Ryanair has expressed disappointment in its business performance, leading to investor dissatisfaction and a 17% drop in the airline’s stock following the release of a weaker-than-expected quarterly earnings report. The airline’s revenue remained static at €3.6 billion ($4 billion), similar to the previous year, but profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, attracting them has required significant effort.
During the earnings call, O’Leary highlighted a 10% growth in passenger traffic, reaching 55 million, but pointed out that this growth is highly dependent on pricing. He stated, “We’re having to repeatedly stimulate fares and bookings,” adding that recent close-in fare performance had been disappointing, particularly as the peak months of July, August, and September approach.
In addition to the declining demand, Ryanair is contending with increased labor costs and has cited Boeing’s delivery delays as a contributing factor, a long-standing issue for O’Leary. Despite a recent incident involving a 737 Max 9 during a flight, he has consistently urged Boeing to improve its performance.
O’Leary also indicated that Ryanair’s customers may be facing more challenges than they did during the early stages of economic recovery following the COVID-19 pandemic. Reports suggest that ongoing inflation and stagnant economic growth are starting to impact the financial situation of consumers in the European Union. As a result, he mentioned that operating with fewer aircraft might benefit Ryanair in the near future.
Looking ahead, O’Leary confirmed that the airline would have less capacity for the summer of 2025 than initially planned due to Boeing’s delivery issues. “We’re looking at two years of essentially no capacity growth,” he stated, adding that if consumer pressure continues over the next 12 to 18 months, Ryanair may find itself in a better position.