Ryanair has expressed disappointment with its recent business performance, leading to a significant drop in its stock price, which has fallen by 17% following the release of a quarterly earnings report that was weaker than anticipated. The Irish budget airline reported a revenue of €3.6 billion ($4 billion), marking no change from previous year figures. However, profits experienced a dramatic decline, nearly halving to €336 million.
CEO Michael O’Leary acknowledged that while the number of passengers flying with Ryanair surged by 10%, reaching 55 million, this growth came at a cost. He indicated that the airline is facing challenges in maintaining bookings and favorable fares, especially as it approaches the busy summer months of July, August, and September.
In addition to diminished demand, Ryanair is grappling with increased labor costs and continues to contend with delays in airplane deliveries from Boeing, a long-standing issue voiced by O’Leary. He pointed out that the current economic climate, characterized by inflation and slow growth in the European Union, could be exerting additional pressure on consumers.
Despite these hurdles, O’Leary shared a silver lining. He suggested that a decrease in available capacity for the summer of 2025, as well as a projected lack of capacity growth in the following two years, might position Ryanair favorably should consumer pressures persist over the next year to 18 months.
In summary, while Ryanair faces immediate challenges in revenue and profits, the airline is adapting its strategy in response to market conditions, and O’Leary believes that scaling back on capacity might ultimately benefit the company in a softened market. This outlook provides a sense of cautious optimism as Ryanair recalibrates its operations in light of economic realities.