Ryanair is facing challenges in its business performance, which has led to disappointment among investors. The Irish budget airline’s stock has dropped by 17% following the release of a weaker-than-expected quarterly earnings report. Revenue remained stable at €3.6 billion ($4 billion), similar to last year. However, profits nearly halved to €336 million. CEO Michael O’Leary mentioned that while more passengers are flying with the airline, it requires significant effort to achieve this growth.
Traffic has increased by 10%, amounting to 55 million passengers, but O’Leary noted that this growth comes at a cost. He commented during the company’s earnings call that the airline has had to stimulate fares and bookings repeatedly. Furthermore, the close-in bookings have been disappointing and weaker than anticipated, particularly leading into the busiest months of July, August, and September.
In addition to declining demand, Ryanair is contending with rising labor costs and has attributed some blame to delays in Boeing’s aircraft deliveries, an ongoing frustration for O’Leary. Despite previously supporting the company after a mid-flight incident with a 737 Max 9, he has long urged Boeing to improve its performance.
O’Leary also indicated that Ryanair’s customers seem to be feeling the strain more than they did during the initial recovery from the COVID-19 pandemic. Reports suggest that inflation and sluggish economic growth are affecting consumers in the European Union. This may ultimately benefit Ryanair in terms of capacity management.
“We will have less capacity in summer 2025 than we initially planned due to Boeing delivery issues, and we foresee essentially no capacity growth for the next two years,” O’Leary explained. “If consumer spending is under pressure for the next year or 18 months, being in this position might not be the worst outcome.”