Ryanair has revealed that its quarterly profits slumped by more than a third as the price of jet fuel doubled due to the Iran war and the airline lowered fares to boost demand. The Irish low-cost carrier reported a 34% drop in profits after tax to 538 million euros (£457 million) for the three months to the end of June.
Fuel Costs and Fare Reductions Hit Earnings
The airline said earnings were affected by surging jet fuel prices for the 20% of its fuel needs that is not locked in, as well as a 6% drop in average fares. This offset 6% growth in passenger numbers to 61.3 million and a 1% rise in overall revenues to 4.38 billion euros (£3.72 billion).
Chief executive Michael O’Leary said the airline took action to reduce fares “as the Middle East conflict led to consumer hesitancy, concerns about EU jet-fuel shortages, economic uncertainty and later bookings.” Jet fuel prices doubled to 150 US dollars (£111) a barrel in the quarter as the Iran war sent oil and gas prices rocketing higher, with the vital Strait of Hormuz blocked.
Operating Costs Surge
Higher fuel prices helped send Ryanair’s operating costs jumping 11% higher to 3.42 billion euros (£2.9 billion) in the quarter. An interim peace deal between the US and Iran last month brought some brief respite to oil and energy prices, but they have spiked higher once again as negotiations have broken down and fighting resumed.
Mr O’Leary said it was too early to give a full-year outlook for the airline’s results, which the outcome “highly sensitive to adverse external developments, including conflict escalation in the Middle East and Ukraine, the price of unhedged jet-fuel, macro-economic shocks and continuing European air traffic control strikes and mismanagement.”
Fares Continue to Decline
The Dublin-based airline said fares are continuing to come down “modestly” in the second quarter, despite a recent slight rise in bookings, with passengers continuing to book flights close to departure. “While summer 2026 volumes are strong, the booking window remains closer-in than last year which further reduces visibility,” said Mr O’Leary. “As is normal this early in the year, we have zero second half visibility so it remains far too early to provide any meaningful full-year 2026-27 profit after tax guidance.”
