Ryanair is facing disappointment in its business results, which has also affected investor sentiment. The Irish budget airline’s stock has dropped by 17% following the release of a quarterly earnings report that fell short of expectations. The company’s revenue remained stable at €3.6 billion ($4 billion), similar to last year’s figures, but profits nearly halved to €336 million. CEO Michael O’Leary mentioned that while more passengers are using their services—up 10% to 55 million—achieving this growth is becoming increasingly challenging.
O’Leary stated during the earnings call that the airline is having to significantly stimulate fares and bookings, with particularly disappointing performance noted for close-in bookings as the peak months of July, August, and September approach.
In addition to weak demand, Ryanair is also grappling with rising labor costs and has pinpointed delays in aircraft deliveries from Boeing as a contributing factor. O’Leary has expressed frustration with Boeing in the past but has remained supportive of the company despite this year’s mid-flight incident involving a 737 Max 9.
According to reports, consumers in the European Union are now feeling the impacts of inflation and stagnant economic growth, which may be affecting their travel habits. O’Leary indicated that Ryanair might benefit from operating fewer aircraft in the near future. “We will have less capacity into summer 2025 than we originally scheduled due to delays with Boeing deliveries, and we’re looking at two years of essentially no capacity growth,” he said. “If consumers are under pressure for the next year or 18 months, that might not be the worst position for us.”