Ryanair is facing disappointment in its business performance, which has also led to investor discontent. The Irish low-cost airline’s shares have plummeted by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported revenues of €3.6 billion ($4 billion), roughly unchanged from last year, while profits nearly halved to €336 million. CEO Michael O’Leary acknowledged that while more passengers are flying with Ryanair, attracting them has become increasingly challenging.
On the company’s earnings call, O’Leary noted a 10% increase in passenger traffic, bringing the total to 55 million, but emphasized that this growth is only sustainable at competitive pricing. He revealed that stimulating fare and booking activity has been a necessity, with near-term bookings showing disappointing performance, especially as the busy months of July, August, and September approach.
In addition to decreased demand, Ryanair is grappling with rising labor costs and has attributed some blame to delays in Boeing’s aircraft deliveries, a longstanding issue for O’Leary. Despite past incidents, including a mid-flight door malfunction on a 737 Max 9, he has consistently urged Boeing to improve its operations.
O’Leary also conveyed concerns that customers may be feeling more financial pressure compared to the earlier phases of the COVID-19 recovery. Reports suggest that prolonged inflation and sluggish economic growth are impacting consumers in the European Union. In light of this, he proposed that operating fewer aircraft might ultimately benefit Ryanair.
“We will have less capacity into summer 2025 than we originally planned due to Boeing delivery issues, leading to two years with essentially no capacity growth,” O’Leary explained. “If consumer pressures persist over the next year or 18 months, that might not be the worst scenario for us.”