This photo shows an aircraft of the Irish low-cost airline Ryanair parked at Thessaloniki Airport “Macedonia” in Thessaloniki on May 7, 2026.
Sakis Mitrolidis | AFP | Getty Images
ryanair The low-cost airline reported a 34% drop in first-quarter profits as consumers delayed bookings amid the Middle East crisis, and struggling European airlines warned on Monday that they faced a “hard winter” ahead.
The company’s after-tax profit for the April-June period was 538 million euros ($615.3 million), down from 820 million euros a year earlier.
Ryanair said 20% of its unhedged fuel oil was exposed to price increases and ticket fares fell 6%. Operating costs also increased by 11% to €3.81 billion as unhedged fuel 20% prices more than doubled in the quarter.
The stock price fell 5.6% immediately after the market opened.
The company’s 2027 jet fuel is currently 80% hedged at $67 per barrel and 15% in 2028 at $85 per barrel.
Ryanair CEO Michael O’Leary said: “Fares in the first quarter (which benefited from a full Easter holiday in April 2025) needed the stimulus as the Middle East conflict led to consumer hesitation, concerns about EU jet fuel shortages, economic uncertainty and subsequent bookings.”
Mr O’Leary added that the airline’s “conservative hedging policy” has shielded it from fluctuations in oil prices amid continued turmoil in the Middle East, giving it “a cost advantage over other EU competitors”, while “the unprofitable airline faces a tough winter”.
John Strickland, an aviation analyst and director of JLS Consulting, told CNBC’s “Squawk Box Europe” on Monday that when the war began, Ryanair was forced to cut fares as travelers were desperate to book summer vacations, and even though traffic increased, revenue was still hurting.
Ryanair issued a conservative outlook for the remainder of its financial year, saying its operating costs were largely dependent on unhedged jet fuel prices. Meanwhile, the company said its after-tax profits remain “highly sensitive” to adverse geopolitical developments, such as the escalating conflict in the Middle East and Ukraine.
“Despite recent modest volume increases and reduced price stimulus, second-quarter pricing trended slightly lower (year-on-year), with final first-half freight results highly dependent on the strength of closed bookings in August and September,” O’Leary said. “As usual at the start of the year, the outlook for the second half of the year is zero, so it is still too early to provide meaningful FY27 PAT guidance.”
Winter “failure” is coming
Ryanair’s Mr. O’Leary told CNBC in April that if jet fuel prices continued to rise, competitors would suffer “failures.”
The average price of jet fuel rose to $127 per barrel in the week ending July 10, a 41% increase from a year ago, according to the 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, as most of Europe’s jet fuel imports come from the Middle East. The region had to look to international markets to secure alternative supplies.
“If prices stay high for longer this summer, many of our European competitors will face serious financial difficulties,” O’Leary told CNBC’s Ben Boulos at the Norges Bank Investment Management Conference in Oslo in May.
JLS’ Strickland said several smaller airlines have gone bankrupt in recent weeks, adding to the pressure of bankruptcies and flight cancellations in the winter.
“If fuel prices remain high, we expect this winter downturn to result in more severe cancellations than we have seen across all airlines to date.”
Mr O’Leary added at the time: “I can assure the public there will be no price increases, no fuel hedging, no fuel surcharges, no matter what happens to supplies over the summer.”
Strickland said the company benefits from a “load-factor active-revenue passive approach,” which means selling seats at a slightly lower price while expecting passengers to spend on additional services.
“Of course, the passenger sitting in the seat is going to spend something, even if the actual ticket price is lower. It might just be a cup of coffee on the plane, but there’s also a good chance they’re adding extra baggage or buying a rental car with Ryanair. So this is a big driver, around 20-25% of the company’s total revenue,” Strickland said.
