Ryanair is facing challenges in its business performance, resulting in disappointment among investors. The Irish budget airline’s stock has dropped 17% following the release of its quarterly earnings report, which revealed revenue of €3.6 billion ($4 billion), approximately unchanged from the previous year. However, profits have nearly halved to €336 million. CEO Michael O’Leary acknowledged an increase in passenger numbers, rising 10% to 55 million, but noted that this growth relies heavily on competitive pricing.
During the earnings call, O’Leary mentioned the need for continual fare stimulation and expressed disappointment with close-in bookings leading up to the peak months of July, August, and September. In addition to dampened demand, the airline is grappling with rising labor costs and disruptions due to Boeing’s delivery delays, a long-standing issue for O’Leary. Despite previous support for Boeing, he has urged the manufacturer to resolve ongoing problems.
Furthermore, O’Leary observed that Ryanair’s customers are displaying signs of financial strain as inflation and slowing economic growth impact spending in the European Union. As a result, he indicated that operating fewer aircraft might be beneficial for Ryanair’s future operations.
Looking ahead, O’Leary stated that the airline would have less capacity in summer 2025 than initially planned due to Boeing’s delivery schedule, predicting two years of no capacity growth. He suggested that this might be advantageous if consumer pressure continues over the next 12 to 18 months.