Ryanair has said it has “almost zero concerns” about jet fuel supplies this summer, but warned that weaker airlines could collapse if fuel prices remain high due to the conflict in Iran. The budget airline's chief executive, Michael O’Leary, stated that Europe has found alternative fuel sources, but persistent consumer uncertainty has led to lower summer bookings, keeping fares down.
“There was a real concern in Europe two months ago. We now have almost zero concerns over fuel supplies in Europe. The challenge remains price,” O’Leary said. Ryanair has hedged 80% of its jet fuel requirements to April 2027 at about $67 a barrel, but unit costs could rise by 5% if fuel prices stay high. O’Leary warned that a prolonged conflict could cause airlines with lower hedging to go bust this winter.
The airline reported a record profit after tax of €2.26bn for the year to March, but suspended guidance for its 2027 financial year due to potential increases in fuel, environmental taxes, and wage bills. Ryanair also expects EU environmental taxes to rise by €300m this year to about €1.4bn, making EU air travel less competitive.
Ryanair cut its outlook for summer fares, now expecting them to be “broadly flat” on last year, after previously forecasting a modest increase. Chief financial officer Neil Sorahan said demand remains strong but people are booking later, which could lead to higher fares for late bookers. Dan Coatsworth of AJ Bell noted that the market is too fragile to raise fares, as higher inflation continues to squeeze consumer spending.
Ryanair is in negotiations to extend O’Leary’s contract beyond 2028 to 2032, with a proposed deal allowing him to buy 10m shares at pre-war market prices if ambitious profit or share price targets are met. Sorahan said details would be confirmed in the coming weeks.
