Ryanair is facing challenges in its business performance, leading to disappointment among investors. The budget airline’s stock has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The company’s revenue remained steady at €3.6 billion ($4 billion), similar to the previous year. However, profits saw a significant decline, nearly halving to €336 million. CEO Michael O’Leary noted that while passenger numbers have increased, the airline is exerting considerable effort to achieve this growth.
O’Leary mentioned during the earnings call that traffic growth was robust, with 55 million passengers, reflecting a 10% increase. However, this growth comes at a cost, as the airline is compelled to continuously stimulate fares and bookings. He expressed concern that recent booking performance, particularly before the peak travel months of July, August, and September, had fallen short of expectations.
In addition to weaker demand, Ryanair is grappling with rising labor costs and has pointed fingers at Boeing for delivery delays, a persistent issue for O’Leary. Despite past incidents, including a mid-flight door plug failure on a 737 Max 9, O’Leary has urged Boeing to improve its operations.
O’Leary also indicated that consumers may be feeling the strain from prolonged inflation and slow economic growth in the European Union, which could result in Ryanair operating with fewer aircraft. He projected that the airline would have less capacity available in the summer of 2025 than originally planned due to Boeing’s delivery impacts and anticipated sustained consumer pressure over the next year to 18 months. He suggested that this situation might not be entirely negative for the airline.