Ryanair profit falls 15% to €2.15 billion as unhedged fuel costs double
Key Facts
Ryanair reported on November 2 that first-half after-tax profit fell 15% to €2.15 billion from €2.54 billion a year earlier. The decline came despite growth in passenger traffic and revenue, as the cost of unhedged fuel weighed on results. In the second financial quarter, after-tax profit was €1.61 billion, down 6% year on year, while passenger numbers rose 5% to 64.5 million. The results show a widening gap between business growth and the rising cost of operating it. They did not indicate a beat on analyst expectations; Reuters said the result was in line with an analyst poll.
First-half revenue rose 3% to €10.08 billion, but operating costs increased 10% to €7.69 billion. The company said unit costs rose 5% after prices for unhedged jet fuel, which accounts for 20% of its requirements, doubled to about $130 a barrel. In the second quarter, the average fare fell 2% to €63.40, despite a 4% increase in total revenue to €5.70 billion. The divergence between revenue and profit reflects the impact of higher costs on results for the period. The increase in passenger numbers did not prevent quarterly and first-half profit from falling.
Ryanair had hedged 80% of its fuel requirements for the 2027 financial year, ending in March 2027, at about $67 a barrel. It had hedged 25% of its requirements for the 2028 financial year at about $95 a barrel. The hedges limit the exposure of part of its purchases to price fluctuations, but the company faces higher costs on the unhedged volume. It said higher short-haul fares in Europe would not fully offset an estimated increase of about €2 billion in its fuel bill for the financial year ending in March 2028, based on current futures prices. The expected fuel pressures therefore extend beyond the current financial year, despite existing hedges.
In a previous statement on October 20, Chief Executive Michael O’Leary said European air fares could rise between 10% and 20% over the coming year, attributing this to higher jet fuel costs and a shortage of available seats. This relates to a broader outlook for air fares in Europe and is not an announcement of a specific increase in Ryanair ticket prices. In its current results, the company said European short-haul fares were expected to rise materially next year, without specifying a percentage for its own fares. O’Leary also said jet fuel could remain expensive until well into 2027 if the conflict in the Middle East is not resolved quickly. “We expect jet fuel prices to remain high until well into 2027.”
Ryanair said it was reviewing costs in response to its fuel bill, with a temporary pay freeze possible when labor agreements come up for review. The options it cited include negotiating with airports, reducing aircraft crew ratios and increasing the use of artificial intelligence in office operations. It said third-quarter demand was strong and fares were trending slightly above the same period a year earlier, but the short booking window limited visibility. Reuters reported that the average fare fell 2% in the second quarter ended in September, and was set to rise slightly in the current quarter compared with the same period a year earlier. These indicators put a near-term improvement in fares against continued uncertainty over the fuel outlook.
The company cut its passenger traffic target for the 2027 financial year to 214 million from 216 million, saying winter traffic between November and March would be broadly flat year on year. It also announced an interim dividend of €0.273 a share, payable in late February 2027, and an €800 million share buyback programme starting in February. The company had gross cash of €2.6 billion on September 30, alongside a €1.1 billion revolving credit facility, of which about €700 million was undrawn. It also expects to take delivery of its first 16 MAX-10 aircraft in spring 2027. The company is targeting passenger traffic growth to more than 220 million the following year, an increase of 3%.
Ryanair’s RYAAY-listed shares closed at $53.72 on October 30, 2026, according to EL7 data. The figure does not include a higher price during the session. Available data do not establish that the shares rose after the results announcement. The close came before the company announced its first-half results on November 2. The share price reading is separate from the published earnings results, which showed second-quarter and first-half profit declines.