Ryanair is facing challenges in its business, leading to disappointment among investors. The Irish budget airline’s stock has dropped 17% following the release of a quarterly earnings report that fell short of expectations. Revenue remained steady at €3.6 billion ($4 billion), nearly unchanged from last year, while profits plummeted nearly 50% to €336 million. CEO Michael O’Leary acknowledged that while more passengers are flying with Ryanair, the airline is exerting considerable effort to attract these customers.
O’Leary reported a strong traffic increase of 10%, bringing the total to 55 million passengers. However, he noted the growth comes at a cost, stating, “We’re having to repeatedly stimulate fares and bookings.” He expressed concerns about disappointing close-in bookings as the airline approaches peak travel months.
The airline is not only contending with decreased demand but is also facing rising labor costs and has pointed fingers at Boeing for ongoing delivery delays, a persistent issue for O’Leary. Despite earlier incidents involving the 737 Max 9, he has continued to urge Boeing to address these delivery problems.
O’Leary mentioned that consumers may be feeling the impact of inflation and reduced economic growth within the European Union, leading to a potential decline in airline capacity. He indicated that Ryanair plans to reduce its summer 2025 capacity compared to its original schedule due to the delays in Boeing deliveries. In light of consumer pressures expected over the next year or so, he suggested that operating fewer aircraft could ultimately benefit Ryanair.