Ryanair is expressing dissatisfaction with its business performance, and this sentiment is reflected among its investors. The Irish low-cost airline’s stock has dropped by 17% following a quarterly earnings report that fell short of expectations. Revenue remained steady at €3.6 billion ($4 billion) compared to last year, but profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, attracting them is becoming increasingly challenging.
O’Leary mentioned during the earnings call that traffic is growing, with a 10% increase to 55 million passengers, but this growth comes at a cost. “We’re having to repeatedly stimulate fares and bookings, and the close-in fare performance has been disappointing, especially leading into the peak months of July, August, and September,” he stated.
Compounding the issue of diminishing demand, the airline is also facing rising labor costs and has attributed some of its struggles to Boeing’s ongoing delivery delays, a particular frustration for O’Leary. Despite a recent incident involving a 737 Max 9 aircraft, he has consistently urged Boeing to improve its performance.
O’Leary further indicated that Ryanair’s customers may be feeling the impact of prolonged inflation and slowing economic growth in the European Union, which could potentially benefit the airline in the long run. “We will have less capacity into summer 2025 than we originally scheduled with our Boeing deliveries, followed by a period of no capacity growth,” he explained. He added that if consumer pressure continues over the next year to 18 months, having less capacity might not be detrimental for the airline.