Ryanair is facing disappointment regarding its business performance, which has also affected investor sentiment. The Irish budget airline’s stock has fallen by 17% following a quarterly earnings report that did not meet expectations. The company reported revenue of €3.6 billion ($4 billion), matching figures from the previous year, but profits nearly halved to €336 million. CEO Michael O’Leary highlighted that while the airline is managing to attract more passengers, it is increasingly challenging to do so.
During the earnings call, O’Leary noted a 10% increase in passenger traffic, reaching 55 million, but emphasized that this growth is tied to pricing pressures. He mentioned the need to stimulate fares and bookings repeatedly, especially as demand has been weaker than anticipated in the lead-up to the peak travel months of July, August, and September.
Additionally, the airline is grappling with rising labor costs and has expressed frustration over Boeing’s delivery delays, an ongoing issue for O’Leary. Despite standing by the manufacturer following an incident with a 737 Max 9 earlier this year, he has urged Boeing to address its problems.
O’Leary also indicated that customers may be feeling the pinch from rising inflation and slower economic growth within the European Union. He suggested that operating with reduced capacity might benefit Ryanair in the long run.
“We will have less capacity going into summer 2025 than we originally planned with our Boeing deliveries, and we are looking at two years with essentially no capacity growth,” O’Leary stated. “If consumers are under financial pressure for the next year to 18 months, that may not be the worst situation for us.”