Ryanair profits drop 34% as Iran war drives up fuel costs

Ryanair ↘ 2.12% reported a 34% drop in pre-tax profits to €593 million for the April-June quarter, as the ongoing Middle East conflict involving Iran dampened consumer travel demand and pushed jet fuel prices higher, the airline said on Monday.bbc+1

Europe's largest budget carrier was forced to cut average fares by 6% compared to the same period last year to stimulate bookings, while sales remained flat during the quarter. The results fell short of analyst expectations, with shares declining in early trading.marketbeat+1

Conflict Squeezes Both Sides of the Ledger

The war has created a double blow for Ryanair, raising fuel costs while simultaneously weakening consumer confidence in booking travel. While Ryanair hedged 80% of its fuel requirements through April 2027 at roughly $67 per barrel — a strategy credited with driving its record €2.26 billion full-year profit through March 2026 — the airline's hedging position for the current fiscal year has left it more exposed to spot prices.investing+1

CEO Michael O'Leary had warned earlier this year that the closure of the Strait of Hormuz was disrupting jet fuel supply chains across Europe. In March, he cautioned that 10% to 25% of Ryanair's fuel supplies could be at risk through May and June if the conflict persisted.youtube+1

Industry-Wide Pressure

Ryanair's results reflect broader pain across the aviation sector. The global airline industry nearly halved its 2026 profit forecast in June, now expecting combined net profits of $23 billion, down from $45 billion previously projected, citing the Middle East conflict.facebook

When Ryanair reported its full-year results in May, it declined to issue annual guidance for fiscal 2027, pointing to fuel price volatility and limited booking visibility. The airline had noted at the time that fares were weakening in response to the conflict, with expectations for prices to come under further pressure.breakingnews+1

The quarter's Easter timing also contributed to the fare decline, according to the company. Ryanair's Irish Stock Exchange-listed shares fell more than 2.5% following the announcement.flightglobal+1