Ryanair is expressing disappointment with its recent business performance, leading to investor dissatisfaction as well. The Irish budget airline’s stock has dropped 17% following a quarterly earnings report that came in below expectations. The company reported revenue of €3.6 billion ($4 billion), which is comparable to the previous year, but profits plummeted by nearly half to €336 million. CEO Michael O’Leary stated that while more passengers are flying with Ryanair, attracting them has required substantial effort.
During the earnings call, O’Leary noted that passenger numbers have grown by 10%, reaching 55 million, but this growth comes at a cost. “We are continuously having to stimulate fares and bookings,” he explained. He also mentioned that close-in fares and bookings have been disappointingly below expectations, particularly in preparation for the typically busy months of July, August, and September.
In addition to the softening demand, Ryanair is facing rising labor costs and has attributed some challenges to delays in aircraft deliveries from Boeing, an ongoing issue for O’Leary. Despite his support for Boeing following an incident with a 737 Max 9 earlier this year, he has been vocal about the need for the manufacturer to improve operations.
O’Leary also suggested that Ryanair’s customers seem to be feeling the pressure more than they did during the initial recovery from the COVID-19 pandemic. Reports indicate that prolonged inflation and stagnant economic growth are beginning to affect consumers within the European Union. This situation may lead Ryanair to benefit from reducing its fleet.
“We will have less capacity going into summer 2025 than we had originally planned due to Boeing’s delivery schedule, and we expect two years with essentially no capacity growth,” O’Leary explained. “If consumers face pressure over the next year or 18 months, that might not be the worst position for us to be in.”