Ryanair says fares will rise but not enough to cover €2bn fuel hit

Ryanair said on Monday that half-year profit after tax fell 15% to €2.15bn, from €2.54bn a year earlier, as the price of its unhedged jet fuel doubled.

Average fares fell 4% over the six months to 30 September, which include peak summer, while passenger numbers grew 6% to 125.8m.

The airline expects European short-haul fares to rise materially, but said this is “still unlikely to provide a full offset” for an estimated c.€2bn increase in its fuel bill for the financial year known as FY28.

That estimate is based on current forward prices, and the airline said all EU carriers face a significantly higher fuel bill as low-cost oil hedges roll off ahead of summer 2027.

Revenue rose 3% to €10.08bn, but operating costs climbed 10% to €7.69bn, a faster rate that cut into profit.

Fuel and oil costs rose 15% to €3.40bn, as the 20% of its fuel left unhedged doubled in price to around $130 a barrel.

Ryanair has hedged 80% of its fuel for the current financial year, which ends in March 2027, at $67 a barrel, which it said has helped insulate earnings.

For FY28 it has covered 25% of its fuel at $95 a barrel, a position it said it extended after recent dips in oil prices.

Ryanair said it expects jet fuel prices to stay elevated well into 2027 unless there is a swift resolution of the Middle East conflict.

It is reviewing costs across its airlines, with a focus on airport negotiations, maturing labour agreements that may require temporary pay freezes, and other areas.

Chief executive Michael O’Leary said fares fell in the half because the Middle East conflict led to consumer hesitancy and later bookings, and because April did not have a full Easter.

On the outlook, the airline said demand for the third quarter is strong, with fares trending modestly ahead of the same quarter a year earlier.

However, it said bookings are being made closer to travel, which reduces visibility, and it has no view yet of the final quarter.

It therefore said it is too early to give meaningful profit guidance for the full year, which remains sensitive to conflict, fuel prices and air traffic control disruption.

Ryanair cut its target for passengers this year from 216m to 214m, which it said reduces its exposure to unhedged fuel and leaves winter traffic broadly flat.

It plans to grow traffic by 3% to over 220m passengers next year, helped by the first 16 Boeing MAX-10 aircraft, due in spring 2027 subject to regulatory certification.

Gross cash stood at €2.6bn at 30 September, after €1.3bn of debt repayments, €0.8bn of capital spending and €0.4bn of shareholder distributions.

The board declared an interim dividend of €0.273 a share, payable in late February 2027, and another €800m share buyback starting in February.