Ryanair is facing challenges with its business performance, leading to disappointment among investors. The Irish budget airline has seen its stock prices drop by 17% following the release of its quarterly earnings report, which fell short of expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), similar to last year, but profits plummeted nearly 50% to €336 million.
CEO Michael O’Leary noted that while there has been an increase in passenger numbers, the airline is having to exert considerable effort to attract these customers. During the earnings call, O’Leary mentioned a strong traffic growth of 10%, totaling 55 million passengers, but he emphasized that this growth comes at a price. He expressed concerns about disappointing close-in bookings as the peak summer months of July, August, and September approach.
In addition to softening demand, Ryanair is grappling with rising labor costs and ongoing delivery delays from Boeing, which O’Leary has criticized for years. Despite facing setbacks, he reassured investors that the airline’s customer base seems to be feeling the strain of inflation and slowed economic growth in the European Union more than during the early stages of the COVID-19 recovery.
Looking ahead, O’Leary stated that Ryanair would operate with less capacity in the summer of 2025 than initially planned due to Boeing’s delays, and he anticipated a period of no capacity growth for the following two years. He suggested that if consumers are under financial pressure in the coming year or 18 months, this could potentially benefit Ryanair’s strategy.