Ryanair has adjusted its summer fare projections downwards, now anticipating a mid-single digit decline for the first quarter and 'broadly flat' pricing for July to September. The budget airline attributes this to escalating fuel costs and consumer uncertainty stemming from the Middle East conflict.
Profit Growth Amid Fuel Challenges
The airline reported a 40% increase in underlying after-tax profits, reaching 2.26 billion euro (£1.96 billion) for the year ending 31 March, which was slightly better than expected. Despite having secured pricing for 80% of its jet fuel needs, Ryanair warned that the cost of the remaining 20% has 'spiked' due to the Iran war, potentially causing a mid-single digit percentage increase in overall costs by 2026-27.
Impact of Middle East Conflict on Fuel Supply
Chief Executive Michael O'Leary stated that European airlines are sourcing jet fuel from alternative countries to overcome supply shocks caused by the blockade of the Strait of Hormuz. He noted that demand remains robust despite an increase in last-minute bookings, as travellers adapt to the evolving situation.
Ryanair is close to finalising a four-year contract extension for CEO Michael O'Leary from March 2028, which includes a proposal for 10 million share awards contingent on ambitious profit after tax or share price growth targets.
In full, Ryanair issues air fare warning due to soaring fuel costs sparked by Iran war, as the company navigates a complex geopolitical landscape affecting global aviation.
