Soaring fuel costs and lower fares sees Ryanair profit fall 15% this year

Chief executive of Ryanair Michael O’Leary said fares fell during the first half of its financial year as the “Middle East conflict led to consumer hesitancy and later bookings”.

Despite strong growth in passenger numbers during the first half of its financial year, budget airline Ryanair has seen its profit after tax fall 15% to €2.15bn as the cost of unhedged jet fuel rose and price charged on fares fell by 4%, the company has said.

Overall, the company’s revenue rose by 3% to €10.08bn with its scheduled revenue rising 1% to €7bn between April and September. In that time traffic grew 6% to 125.8m compared to the same period last year. 

Ancillary revenue grew 6% to €3.08bn.

The airline said that its average fare for this period stood at €55.70.

Ryanair’s current financial year is for 2027 which ends on March 31.

Chief executive of Ryanair Michael O’Leary said fares fell during the first half of its financial year as the “Middle East conflict led to consumer hesitancy and later bookings”.

Operating costs rose 10% to €7.69bn as the price of the airline's 20% unhedged jet-fuel doubled and supplier compensation ceased following delivery of our final B-8200 “Gamechanger” aircraft from Boeing in the spring.

The airline is expecting to take delivery of its first 16 new Boeing Max-10 aircrafts during the spring next year.

The company has 80% of its jet fuel hedged at $67 a barrel until March next year.

Ryanair has already reduced the number of flights it plans to operate during this winter period in order to limit its exposure to unhedged fuel costs. As a result it has reduced its passenger traffic target for the full financial year from 216m to 214m.

“Next year, with 16 new MAX-10s in our S.27 fleet, we plan to grow traffic to over 220m passengers,” Mr O’Leary said.

“We continue to allocate this scarce capacity to those States, Regions and Airports cutting aviation taxes and lowering fees to incentivise growth while switching flights and traffic away from high tax/rising cost markets like Austria, Germany and Regional Spain,” he said.

Mr O’Leary said the company expects European short-haul capacity to “remain constrained” into the early 2030s as the two large airline manufacturers remain behind their production targets.

In its current financial year, Ryanair is expecting to grow its passenger traffic by 3% to 214m. However, it said that its final unit costs for the year will depend on the price of unhedged jet fuel in the second half of its year.

“While quarter three demand is strong, with fares trending modestly ahead of the same quarter last year, the booking window remains closer-in which reduces visibility. Quarter three fare outcome will heavily depend on the strength of close-in October/November school mid-term and Christmas bookings,” Mr O’Leary said, adding that it has “zero quarter four visibility” which is “normal at this time of year”.

“Unless there is a swift resolution of the Middle East conflict, we expect jet-fuel prices to remain elevated well into 2027,” Mr O’Leary said.

“As low cost oil hedges roll off ahead of summer 2027 all EU airlines face a significantly higher fuel bill next year. While we believe European short haul airfares will increase materially to reflect these much higher jet-fuel prices and competitor capacity reductions, this is still unlikely to provide a full offset for an estimated €2bn increase - based on current forward prices - in our financial year 2028 fuel bill.”