Ryanair has expressed disappointment in its recent business performance, leading to a 17% drop in its stock value following a less-than-expected quarterly earnings report. The Irish low-cost airline reported revenue of €3.6 billion ($4 billion), remaining on par with last year. However, its profits plummeted by nearly half to €336 million. CEO Michael O’Leary highlighted that while more passengers are flying with Ryanair, attracting them has become increasingly challenging.
During the company’s earnings call, O’Leary noted a 10% increase in traffic, totaling 55 million passengers, but emphasized that this growth comes at a cost. He indicated that the airline has been compelled to consistently lower fares and boost bookings, with disappointing close-in fare performance leading up to the peak travel months of July, August, and September.
In addition to softening demand, Ryanair is grappling with rising labor costs and has criticized Boeing for delivery delays, a longstanding issue for O’Leary. Despite recent complications, including a mid-flight incident involving a 737 Max 9, he has been vocal about the need for Boeing to improve operations.
O’Leary also mentioned that customers are facing more challenges than during the earlier stages of the economic recovery post-COVID-19. Reports suggest that ongoing inflation and slow economic growth are impacting spending in the European Union. Given this situation, he indicated that operating with a smaller fleet might actually benefit Ryanair in the long run.
“We will have less capacity in the summer of 2025 than we initially planned with our Boeing deliveries, and we’re looking at two years without any capacity growth at all,” O’Leary stated. “If consumers are under pressure for the next year or 18 months, being in that position might not be unfavorable.”