Ryanair has expressed disappointment in its recent business performance, leading to frustration among investors. The Irish budget airline saw its stock drop by 17% following the release of a quarterly earnings report that fell short of expectations. Revenue remained steady at €3.6 billion ($4 billion), comparable to last year, while profits nearly halved to €336 million. CEO Michael O’Leary highlighted that while there is an increase in passenger numbers, achieving this growth requires significant effort.
O’Leary noted a 10% rise in passenger traffic, totaling 55 million, but emphasized that this growth is primarily driven by competitive pricing. He pointed out that the fares and recent booking performance have been disappointing as the airline enters the peak travel months of July, August, and September.
In addition to reduced demand, Ryanair is facing increased labor costs and has partially attributed its challenges to delays in aircraft deliveries from Boeing, a longstanding frustration for O’Leary. Despite previously defending Boeing after an incident involving a 737 Max 9 aircraft, he has continued to call for improvements from the manufacturer.
O’Leary also indicated that airline customers may be feeling more financial strain than earlier in the COVID-19 recovery phase, as inflation and slow economic growth begin to impact consumers in the European Union. He suggested that operating with fewer aircraft might ultimately benefit Ryanair.
He stated, “We will have less capacity into summer 2025 than we originally scheduled 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.”