Ryanair reports significant profit decline amid rising fuel costs and geopolitical tensions
Ryanair's after-tax profits fell 34% to €538 million for the quarter ending June 2026, influenced by soaring jet fuel prices and a reduction in average fares.
By BBC News
Ryanair has reported a sharp decline in after-tax profits, which dropped 34% to €538 million (£457 million) for the quarter ending June 2026. This decline is attributed to a significant increase in jet fuel prices, which more than doubled for unhedged fuel, and a 6% reduction in average fares as the airline sought to stimulate demand amidst geopolitical tensions.
The airline's total revenue increased by 1% to €4.38 billion, while passenger numbers rose by 6% to 61.3 million, aided by the Easter holiday in April. However, operating costs surged by 11% to €3.81 billion, leading to a challenging financial environment.
Ryanair's Chief Executive, Michael O'Leary, noted that the price of fuel purchased during the quarter had more than doubled compared to the same period in 2025. He indicated that pricing had softened due to economic uncertainty stemming from elevated oil prices and concerns over potential fuel shortages.
The conflict between the US and Iran has disrupted oil supplies via the Strait of Hormuz, causing unhedged jet fuel prices to spike to $150 per barrel. Although Ryanair has hedged 80% of its fuel needs at $67 per barrel, the remaining 20% has been significantly affected by these disruptions.
Looking ahead, Ryanair expects summer fares to remain largely stable from July through September 2026, despite the ongoing volatility in fuel prices. The airline has warned that its annual profits may be sensitive to external factors, including the escalation of conflict in the Middle East and economic uncertainty.
Following the announcement of its quarterly results, Ryanair's shares fell by 4.35% to €24.83. Analysts have expressed concerns about the airline's visibility in the current market, with O'Leary stating that it is too early to provide meaningful profit guidance for the fiscal year 2026-27 due to the unpredictable nature of fuel prices and supply.
Ryanair remains Europe's largest airline by passenger numbers, and despite the challenges, O'Leary mentioned that flights on popular Mediterranean routes continue to be well-booked, with passengers showing a willingness to travel, albeit with later bookings than usual.