Ryanair is facing challenges in its business performance, leading to disappointment among investors. The Irish budget airline’s stock has plummeted by 17% following the release of a quarterly earnings report that fell short of expectations. Revenue remained flat at €3.6 billion ($4 billion), mirroring last year’s figures, while profits nearly halved to €336 million. CEO Michael O’Leary noted that while the number of passengers increased by 10% to 55 million, the airline is having to heavily incentivize fares to attract customers.
During the earnings call, O’Leary expressed concerns about weak close-in fares and bookings, particularly as the peak travel months of July, August, and September approach. In addition to facing softer demand, Ryanair is also contending with higher labor costs and has pointed to delays in aircraft deliveries from Boeing, a recurring issue for the company.
Despite these difficulties, O’Leary mentioned that customers are now showing signs of financial strain, a situation exacerbated by years of inflation and stagnant economic growth in the European Union. He indicated that a potential reduction in jetliner operations might benefit the airline in the long run.
O’Leary stated, “We will have less capacity in summer 2025 than we are originally scheduled to have with our Boeing delivery, and then we’re into two years of essentially no capacity growth at all. If the consumer is going to be under pressure for the next year or 18 months, that might not be the worst place to be.”