Europe's largest budget carrier posted a 40% profit jump to €2.26 billion but cited Middle East fuel uncertainty in declining to forecast fares
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For the fiscal year ending in March, Ryanair posted a record €2.3 billion ($2.7 billion) in after-tax profit, a 40% gain over the prior year, though ongoing fuel cost volatility tied to the Middle East conflict led the carrier to withhold a firm financial outlook.
The company said it carried 208.4 million passengers during the period, a 4% year-over-year increase, while total revenue declined 11% to €15.54 billion.
Following the earnings release, shares fell 2.7% when markets opened Monday, according to CNBC, and have now lost 27.5% of their value since the start of the year.
Summer fares, once projected to tick upward, are now expected to land roughly in line with last year. Ryanair pointed to a shift toward later bookings as a factor that has clouded its ability to project demand, with peak-season results hinging on how travelers book in the final weeks before departure.
Speaking to CNBC, CFO Neil Sorahan said the carrier locked in hedges covering 80% of its summer fuel needs at $668 per metric ton. The unhedged portion — 20% of its fuel requirements — has seen sharp price increases amid market volatility, he said, adding that the carrier has drawn up contingency plans for more severe disruption scenarios while ruling out cancellations.
"Do we have plans for some kind of Armageddon situation? Of course, we do, but I don't see that coming to pass," Sorahan told CNBC. "As things stand, we're operating a full schedule this summer, and plan to operate a full schedule into the winter period."
On supply security, Sorahan said Europe's reliance on Strait of Hormuz shipments has been falling as producers redirect crude from the U.S., Venezuela, Brazil, and other markets — a shift he said means Ryanair is not especially worried about access to fuel. Sustained high prices, he argued, actually favor Ryanair given the depth of its hedging program. Sorahan also warned that some smaller European airlines could run into serious trouble before the winter is out.
In April, O'Leary told CNBC that a prolonged period of elevated oil prices would push some European carriers into collapse — a scenario he suggested would ultimately work to Ryanair's competitive advantage.
The International Energy Agency warned that Europe had limited jet fuel reserves due to the near-closure of the Strait of Hormuz, which once handled about 25% of the world's seaborne oil trade. Daily shipments of crude and refined products through the Strait dropped to 2 million barrels in March from about 20 million barrels a day before the conflict. The fuel price surge has prompted airlines including SAS, Delta, United, and others to cut schedules, raise fees, or announce fare increases since the war began.
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