Ryanair is expressing disappointment in its recent business performance, which has also led to dissatisfaction among its investors. The stock of the Irish budget airline has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenue of €3.6 billion ($4 billion), comparable to last year’s figures, but profits plummeted nearly by half to €336 million. CEO Michael O’Leary noted that while more passengers are flying with Ryanair, attracting them has required considerable effort.
“Traffic growth is robust, with 55 million passengers representing a 10% increase, but it has come at a cost,” O’Leary stated during the company’s earnings call. He mentioned that there has been a need to continuously stimulate fares and bookings, which have been disappointing in the weeks leading up to the peak months of July, August, and September.
In addition to lower demand, Ryanair is facing increased labor costs and has pointed fingers at Boeing for delivery delays, a long-standing issue that has troubled O’Leary. Despite supporting Boeing following a mid-flight incident with a 737 Max 9 earlier this year, he has been vocal about the need for the aircraft manufacturer to improve its performance.
O’Leary also observed that Ryanair’s customers appear to be feeling the economic strain more now than earlier in the COVID-19 recovery. Reports suggest that persistent inflation and slow economic growth in the European Union are starting to take their toll. This situation could work to Ryanair’s advantage, as O’Leary indicated that the airline might operate fewer aircraft.
“We will have a reduced capacity for the summer of 2025 compared to what we initially planned with our Boeing deliveries, followed by two years of minimal capacity growth,” he explained. “If consumers are likely to face economic pressure in the upcoming 12 to 18 months, being in this position may not be detrimental.”