Ryanair profits down a third as Iran war hits unhedged fuel and forces fare cuts

Dublin-based carrier says it is unable to provide any full-year guidance at this stage.

Ryanair’s first-quarter profit after tax fell more than a third as high jet fuel costs hit the unhedged portion of its fuel and it was forced to slash fares to stimulate demand.

The Irish budget carrier says a spike in the price of the one-fifth of its fuel that was unhedged in the three months to 30 June contributed to a 34% year-on-year drop in profits, to €538 million ($615 million). Fares fell 6% during the quarter, which it attributes primarily to the Middle East conflict and the timing of the Easter holidays.

Passenger numbers were up 6% but the lower fares meant that scheduled revenue dipped 1% to €2.91 billion. Total group revenues were up 1% at €4.38 billion. Operating costs rose 11% to €3.81 billion.

“Q1 fares…required stimulation as the Middle East conflict led to consumer hesitancy, concerns about EU jet-fuel shortages, economic uncertainty and later bookings,” says Ryanair Group chief executive Michael O’Leary, adding that the cost of the 20% of its fuel that was unhedged “more than doubled” in its fiscal first quarter.

Ryanair is 80% hedged until March 2027 and 15% hedged for fiscal 2028.

The carrier is set to receive its first Boeing 737 Max 10 aircraft in spring 2027, with 300 of the larger, more fuel-efficient jets scheduled to join its fleet by 2034.

Ryanair expects European short-haul capacity to remain constrained “until at least 2030” and says its strong balance sheet and efficient fleet make it well placed to continue growing towards its target of more than 300 million passengers by 2034.

Fiscal 2027 traffic remains “on track” to grow 4%.

For the second fiscal quarter, Ryanair says pricing is “trending modestly down”, with final first-half fares “heavily dependent on the strength of close-in bookings” in August and September.

The carrier says it has “zero visibility” for the second half of its fiscal year and it cannot provide any full-year profit guidance. Full-year profits are “highly sensitive to adverse external developments, including conflict escalation in the Middle East and Ukraine, the price of unhedged jet fuel, macroeconomic shocks and continuing European air traffic control strikes”.

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Ryanair profits down a third as Iran war hits unhedged fuel and forces fare cuts

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