Ryanair is facing disappointment with its recent business performance, which has, in turn, disheartened investors. The Irish budget airline’s stock has dropped by 17% following the release of a weaker-than-expected quarterly earnings report. Revenue remained at €3.6 billion ($4 billion), similar to last year, but profits plunged to €336 million, nearly half of the previous year’s figures. CEO Michael O’Leary mentioned that while more passengers are flying with Ryanair, the company must work hard to attract them.
“Traffic growth is strong, up 10% to 55 million passengers, but it comes at a cost,” he said during the earnings call. “We have to stimulate fares and bookings repeatedly. The close-in fares and performance, particularly bookings for the peak months of July, August, and September, have been disappointing and materially weaker than expected.”
The company is also grappling with softer demand, higher labor costs, and delays in deliveries from Boeing, a persistent issue for O’Leary. Despite his support for Boeing after an incident involving a 737 Max 9, he has criticized the planemaker for its delays over the years.
O’Leary also told investors that Ryanair’s customers seem to be struggling more than in the early stages of the COVID-19 economic recovery. According to Reuters, years of inflation and slow economic growth in the European Union are taking a toll on people. In such a scenario, operating fewer aircraft might work to Ryanair’s advantage.
“We will have less capacity into summer 2025 than originally scheduled due to Boeing’s delivery delays, and we will face two years of essentially no capacity growth,” O’Leary said. “If consumer pressure continues for the next year or 18 months, that might not be the worst situation to be in.”