Ryanair profit drops as fuel costs climb
Ryanair's profit fell 15% to 2.15 billion euros in the first fiscal half, as the price of its unhedged jet fuel roughly doubled. Chief executive Michael O'Leary said European airfares could rise 10%, possibly 20%, next year. The airline expects fuel charges to rise by 2 billion euros in its next financial year and has launched a cost review. It also cut its full-year passenger target from 216 million to 214 million. Ryanair has hedged 80% of its fuel needs at about $67 a barrel through March 2027, while Brent crude traded near $110 a barrel on Monday.
Key facts
- Only 25% of fuel needs for the following year are hedged, at about $95 a barrel.
- Ryanair's second-quarter revenue rose 4% to 5.7 billion euros, with passenger traffic up 5%.
- O'Leary said a cost drive could include temporary pay freezes and more use of artificial intelligence.
- O'Leary said jet fuel prices may stay high into 2027 unless the Middle East conflict is quickly resolved.
- The Iran war, in its ninth month, has effectively closed the Strait of Hormuz, which carried about 20% of world oil.
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Why it matters
Higher fuel costs may push up airfares for travellers across Europe in the coming year.
What changed
First published from CNBC, The Local Sweden and Fortune