Ryanair is facing disappointment in its business performance, leading to investor discontent as well. The Irish low-cost airline’s stock has declined by 17% following a quarterly earnings report that fell short of expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), the same as the previous year, but profits nearly halved to €336 million. CEO Michael O’Leary highlighted the increase in passenger numbers, stating that the company has managed to attract more flyers but is putting in excessive effort to achieve this.
O’Leary noted that while traffic grew by 10% to reach 55 million passengers, this growth comes at a cost. “We’re having to continuously stimulate fares and bookings,” he explained during the earnings call. He expressed disappointment in close-in fare performance and bookings, especially leading up to the peak travel months of July, August, and September.
The company is also grappling with rising labor costs and has attributed some of its challenges to delays in deliveries from Boeing, a longstanding issue for O’Leary. Despite standing by the company after a mid-flight incident earlier this year involving a 737 Max 9, he has been urging Boeing to improve its performance for years.
O’Leary mentioned that Ryanair’s customers appear to be feeling more pressure compared to the initial stages of the COVID-19 economic recovery. Reports suggest that inflation and slowing economic growth are beginning to impact consumer spending in the European Union. In light of this, he noted that operating with fewer aircraft might be advantageous for the airline.
“We will have less capacity into summer 2025 than we were originally scheduled to have with our Boeing delivery, followed by two years of essentially no capacity growth,” O’Leary stated. “If consumers are under pressure for the next year or 18 months, that might not be the worst situation to find ourselves in.”