Ryanair is facing challenges in its business performance, resulting in a 17% drop in its stock price following a quarterly earnings report that fell short of expectations. The Irish budget airline reported revenue of €3.6 billion ($4 billion), unchanged from the previous year, but profits were almost halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with the airline, attracting them has required significant effort, as evidenced by the need for fare promotions and stimulation of bookings.
According to O’Leary during the earnings call, passenger traffic has increased by 10%, totaling 55 million passengers, but this growth comes at a cost. He expressed concerns over disappointing close-in fare performance leading into the peak summer months of July, August, and September.
The airline is also grappling with rising labor costs and has attributed some of its struggles to delays in aircraft deliveries from Boeing. O’Leary, who has been vocal about his frustrations with Boeing, raised concerns over ongoing issues that have plagued the airline.
Additionally, he indicated that Ryanair’s customers are feeling the impact of years of inflation and slowing economic growth within the European Union, which may result in less demand for air travel. Looking ahead, O’Leary mentioned that Ryanair plans to reduce its capacity for the summer of 2025 due to delays in Boeing deliveries, suggesting that a lack of growth in capacity over the next two years could potentially be advantageous if consumer demand continues to weaken.