Ryanair stock slides 6% as higher fuel costs amid Iran war dent profit
This photo shows the aircraft of the low-cost Irish airline Ryanair parked at Thessaloniki airport “Makedonia” in Thessaloniki on May 7, 2026.
Sakis Mitrolidis | Afp | Getty Images
ryanair Struggling European airlines face a “tough winter”, it warned on Monday, as the budget carrier reported it had taken a 34% hit as consumers delayed bookings due to the Middle East crisis
The airline’s after-tax profit fell to 538 million euros ($615.3 million) in the April-June quarter, from 820 million euros a year earlier.
Ryanair said 20% of its unhedged fuel was subject to price increases, while ticket prices fell 6%. Operating costs also rose 11% to 3.81 billion euros, as the price of 20% unhedged fuel more than doubled in the quarter.
Shares were last down 6.8%. The stock is up nearly 5% this year.
80% of the company’s 2027 jet fuel is hedged at $67 per barrel, and 15% is hedged for 2028 at $85 per barrel.
Ryanair CEO Michael O’Leary said: “Q1 fares required stimulus (benefiting from full Easter in April 2025) as conflict in the Middle East led to consumer hesitation, concerns about EU jet fuel shortages, economic uncertainty and subsequent bookings.” he said.
O’Leary added that the company’s “conservative hedging policy” had protected it from fluctuations in oil prices as turmoil in the Middle East continued, giving it a “cost advantage over all other EU rivals” and that “unprofitable airlines face a tough winter”.
Travelers were anxious to book summer holidays at the start of the war, forcing Ryanair to cut fares, meaning revenue was still taking a hit despite increased traffic, John Strickland, aviation analyst and director at JLS Consulting, said on CNBC’s “Squawk Box Europe” on Monday.
“We [got] More than 715,000 people are flying with us today,” Ryanair CFO Neil Sorahan told CNBC’s “Squawk Box” on Monday. “There’s no shortage of reservations. There is no shortage of people traveling. They just book a little closer.
“I think there was some hesitation at the beginning of the first quarter where there were some concerns about fuel supply. We all know that’s not an issue. There’s plenty of fuel to get people out of the house and back in. It’s good value for consumers in the market right now.”
Ryanair has issued a conservative forecast for the remainder of the financial year; operating costs depended largely on the price of unhedged jet fuel. Meanwhile, the company said after-tax profits remain “extremely sensitive” to adverse geopolitical developments, including the Middle East and escalating conflict in Ukraine.
“Despite the recent slight increase in volumes and less price stimulation, Q2 prices remain on a modest downward trend (on a year-on-year basis) with the final H1 fare outcome largely dependent on the strength of close bookings in August and September,” O’Leary said. “As is normal this early in the year, we have zero H2 visibility, so it is too early to provide meaningful FY27 PAT guidance.”
Winter ‘failures’ are coming
CFO Sorahan stated that the conflict in the Middle East would lead to “some shake-up in capacity” for weakened European airlines.
“There are many carriers that don’t have the cost base and balance sheet that Ryanair has,” Sorahan said. “We paid off our $1.2 billion final bond in May, so we are now effectively debt-free and own all assets.”
“So I think as you get into the winter period some of the weaker carriers will find it very difficult and we may see some failures over the next few months,” Sorahan continued.
The average jet fuel price rose to $127 per barrel in the week ending July 10, up 41% from the previous year. International Air Travel Association’s Jet Fuel Price Monitor.
At the time, the International Energy Agency warned that Europe could run out of jet fuel within weeks because the majority of jet fuel imports come from the Middle East. The region had to look to international markets to secure alternative supply.
JLS’s Strickland noted that several smaller airlines have failed in recent weeks, with winter bringing greater pressures from failures to cancellations.
“If fuel prices remain high, I expect to see more significant cancellations across all airlines during this year’s weaker winter season than we have seen in a long time.”
“Whatever happens to summer supply, we can assure people that there will be no price increases, no fuel hedging, no fuel escalation tax surcharge,” CEO O’Leary said in April.
Strickland said the company uses a “load factor active revenue passive approach,” which means selling seats at marginally lower rates while expecting passengers to spend on additional services.
“Of course, any passenger sitting in a seat is going to spend something, even if the actual ticket price is low, maybe just a cup of coffee on the plane, but it could be an extra bag or it could be purchasing a rental car through Ryanair. So that’s a big driver, around 20-25% of the company’s total revenue,” Strickland said.
