Ryanair has expressed dissatisfaction with its recent business performance, leading to disappointment among investors. The Irish budget airline’s stock price has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The company reported a revenue of €3.6 billion ($4 billion), remaining flat compared to last year; however, profits nearly halved to €336 million. CEO Michael O’Leary noted that while more passengers are flying with the airline, maintaining this growth has proven to be challenging.
“Traffic growth is strong, with a 10% increase to 55 million passengers, but it comes at a price,” O’Leary stated during the company’s earnings call. “We are having to continuously stimulate fares and bookings, and the demand for close-in fares has been disappointing, particularly as we approach the peak months of July, August, and September.”
In addition to the softer demand, Ryanair is also facing rising labor costs and has attributed some of its challenges to delays in deliveries from Boeing, which has been a long-standing issue for O’Leary. While he has supported Boeing despite technical issues earlier this year, he has persistently urged the manufacturer to improve its operations.
O’Leary also pointed out that customers seem to be facing tougher conditions than they experienced in the early stages of the COVID-19 recovery, as inflation and sluggish economic growth are taking a toll on consumers in the European Union. He suggested that operating with fewer aircraft might be advantageous for Ryanair in this environment.
“We will have less capacity in summer 2025 than originally planned due to Boeing delivery delays, leading to two years with no capacity growth,” O’Leary explained. “If consumer pressure continues for the next year to 18 months, that might not be the worst scenario for us.”