Ryanair is facing challenges in its business performance, leading to disappointment among investors. The Irish low-cost airline’s stock has dropped by 17% following a quarterly earnings report that fell short of expectations. The company’s revenue remained stable at €3.6 billion ($4 billion) compared to the previous year, but profits experienced a significant decline, nearly halving to €336 million. CEO Michael O’Leary highlighted that while passenger numbers increased by 10% to 55 million, it has come at a cost, as the company is having to lower fares and stimulate bookings aggressively.
O’Leary noted that the demand for flights has become weaker than anticipated, especially as the peak travel months of July, August, and September approach. Compounding the challenges, the airline is also grappling with higher labor costs and delays in aircraft deliveries from Boeing, which O’Leary has criticized for years.
He mentioned that Ryanair’s customers are feeling the impact of years of inflation and a slowing economy in the European Union, suggesting that this could lead to a strategic advantage for the airline in terms of managing capacity. O’Leary indicated that the company will operate with less capacity than originally planned for summer 2025 due to Boeing’s delivery setbacks, and there are projections of no capacity growth for the next two years. This adjustment could potentially benefit Ryanair if consumer pressure continues over the next year or 18 months.