Ryanair is experiencing disappointment in its business performance, which has also affected investor sentiment. The Irish low-cost airline saw its stock decline by 17% following a quarterly earnings report that fell short of expectations. Revenue remained stable at €3.6 billion ($4 billion), nearly unchanged from the previous year, but profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with the airline, it requires significant effort to attract them.
O’Leary pointed out that traffic growth is robust, with the number of passengers increasing by 10% to 55 million. However, he emphasized that sustaining this growth comes at a cost, as the airline finds itself frequently needing to stimulate fares and bookings. He expressed concern over underwhelming close-in bookings, particularly approaching the peak travel months of July, August, and September.
In addition to weaker demand, Ryanair is facing higher labor costs and has criticized Boeing for delivery delays, a recurring issue for O’Leary. Despite the challenges, he has maintained confidence in the airline, even after a recent incident involving a 737 Max 9.
Furthermore, O’Leary indicated that consumers may now be feeling the effects of prolonged inflation and stagnant economic growth in the European Union, which could lead to a period of reduced operations for the airline. He mentioned that Ryanair plans to reduce its capacity for the summer of 2025 compared to original schedules due to ongoing Boeing delivery issues, anticipating two years without growth in capacity. He suggested that operating with fewer aircraft might be a prudent strategy if consumer pressures continue in the coming months.