Ryanair has expressed disappointment in its recent business performance, which has also left investors dissatisfied. The stock of the Irish budget airline dropped by 17% following the release of a quarterly earnings report that fell short of expectations. While revenue remained steady at €3.6 billion ($4 billion), profits plummeted nearly 50% to €336 million. CEO Michael O’Leary noted an increase in passenger traffic, which rose 10% to 55 million, yet emphasized the challenges of balancing fares and bookings.
During the earnings call, O’Leary explained that although traffic growth is strong, it comes at a cost, as the company continually has to incentivize fares and bookings. He highlighted disappointing performance in close-in bookings as the peak travel months of July, August, and September approach.
In addition to weak demand, Ryanair faces rising labor costs and has pointed to delays in Boeing aircraft deliveries, a longstanding issue for O’Leary. Despite having confidence in the company following a mid-flight incident involving a 737 Max 9, he has urged Boeing to resolve its delivery problems.
O’Leary indicated that customers might be feeling financial strain as inflation and sluggish economic growth impact the European Union. This situation could result in fewer aircraft in operation for Ryanair, which he suggested might not be detrimental given the potential pressures on consumers over the next year to 18 months. He noted that the airline will have reduced capacity for summer 2025 compared to its original Boeing delivery schedule, leading to two years of minimal growth in capacity.