Ryanair is expressing disappointment in its business performance, reflecting a similar sentiment among investors. The airline’s stock has dropped 17% following a quarterly earnings report that fell short of expectations. The company’s revenue remained stable at €3.6 billion ($4 billion), nearly the same as last year, but profits plummeted almost 50% to €336 million. CEO Michael O’Leary acknowledged that while they are successfully transporting more passengers—up 10% to 55 million—this growth is heavily reliant on pricing strategies.
O’Leary noted during the earnings call that the airline has been forced to continuously stimulate fares and bookings, with disappointing close-in fare performance in the lead-up to the peak travel months of July, August, and September.
In addition to waning demand, Ryanair is facing increased labor costs and has attributed some challenges to Boeing’s ongoing delivery delays, an issue O’Leary has been vocal about for years. Despite recent setbacks, he has remained supportive of the company following a mid-flight incident involving a 737 Max 9.
O’Leary also indicated that passengers may be feeling more financial strain compared to the early stages of the economic recovery from the COVID-19 pandemic, suggesting that ongoing inflation and slower economic growth in the European Union are affecting consumer behavior. He implied that a reduction in the number of aircraft available might ultimately benefit the airline, noting that they will have less capacity available for summer 2025 than initially planned due to delayed Boeing deliveries, with two subsequent years likely seeing no capacity growth. He suggested that being in this position could be advantageous if consumer pressures persist over the next year to 18 months.