Europe's largest airline by passenger numbers said unhedged jet fuel more than doubled in price while fares fell 6% amid consumer hesitancy
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Ryanair reported first-quarter profit after tax of €538 million for the three months through June 30, down 34% from €820 million a year earlier, as the Iran war pushed unhedged jet fuel prices above $150 a barrel and prompted travelers to delay bookings, forcing the airline to cut fares.
The company reported an 11% increase in operating costs to €3.81 billion, the company said. Ryanair locks in prices for 80% of its fuel requirements, but the exposed 20% that trades at market rates more than doubled in cost over those three months. Passenger fares fell 6% year-on-year, and total revenue rose just 1% to €4.38 billion despite a 6% increase in traffic to 61.3 million passengers.
The results fell short of a consensus analyst forecast of €579 million, according to Reuters.
Chief executive Michael O'Leary said the conflict created consumer hesitancy, concerns about jet fuel shortages in Europe, and a shift toward last-minute bookings. "There's a war going on in the world. There's a lot of uncertainty," O'Leary told analysts on Monday, adding that pricing was "trending weaker rather than stronger" in the current quarter and that fares faced a mid-single-digit year-on-year fall through the summer.
The airline said it used a brief ceasefire-related dip in oil prices to extend its hedging program, locking in 15% of its fiscal year 2028 fuel needs at $85 a barrel, on top of the 80% of fiscal year 2027 requirements already hedged at $67 a barrel. O'Leary said that hedging position insulates Ryanair against further oil price swings and widens its cost advantage over competitors.
Ryanair declined to give a full-year profit forecast, saying it was too early to do so given limited visibility into second-half bookings. The company said final results would depend on close-in booking strength in August and September and remain sensitive to Middle East conflict escalation, unhedged fuel prices, and macroeconomic shocks.
Chief financial officer Neil Sorahan said weaker airlines face mounting pressure. "I wouldn't be surprised to see some casualties from some of the weaker guys this year," Sorahan told Reuters, noting his expectation that European aviation would shed meaningful capacity heading into winter in a shift he believes would support higher ticket prices.
Ryanair stock fell more than 5% on Monday following the earnings release.
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