This photo shows an aircraft of the Irish low-cost airline Ryanair parked at Thessaloniki’s “Macedonia” airport in Thessaloniki on May 7, 2026.
Sakis Mitrolidis AfP | Getty Images
Ryanair warned on Monday that Europe’s struggling airlines face a “difficult winter” as the budget carrier reported a 34% drop in first-quarter profits as consumers delayed bookings due to the Middle East crisis
The airline’s profit after tax fell to 538 million euros ($615.3 million) in the April-June quarter, compared with 820 million euros a year earlier.
Ryanair said 20% of its unhedged fuel was exposed to price spikes, while ticket prices fell 6%. Operating costs also rose 11% to 3.81 billion euros as the price of the 20% unsecured fuel more than doubled in the quarter.
The company’s jet fuel for 2027 is currently 80% hedged at $67 per barrel and 15% hedged for 2028 at $85 per barrel.
“First quarter fares (which benefited from a full Easter weekend in April 2025) needed to be boosted as the Middle East conflict led to consumer reluctance, concerns about EU fuel shortages, economic uncertainty and late bookings,” Ryanair CEO Michael O’Leary said.
O’Leary added that the company’s “conservative hedging policy” protects it from oil price volatility as turmoil continues in the Middle East, giving it a “cost advantage over all other EU competitors” while “unprofitable airlines face a difficult winter.”
Ryanair gave a conservative forecast for the remainder of the financial year, with operating costs heavily dependent on the price of unhedged aviation fuel. Meanwhile, profit after tax remains “highly sensitive” to adverse geopolitical developments, including the escalation of conflict in the Middle East and Ukraine, the company said.
“Despite a recent slight increase in volumes and lower pricing incentives, prices are trending slightly lower in the second quarter (year-on-year) and the final outcome of H1 tariffs will depend heavily on the strength of short-term bookings in August and September,” O’Leary said. “As is typical this early in the year, we have no visibility into the second half of the year, so it is still far too early to provide a meaningful PAT forecast for FY27.”
Airline competitors face “failure”
Ryanair’s O’Leary told CNBC in April that competitors will experience “failures” if the price of jet fuel remains high.
The average price of jet fuel rose to $127 a barrel in the week ended July 10, up 41% from a year ago International Air Travel Association Aviation Fuel Price Monitor.
At the time, the International Energy Agency warned that Europe could run out of jet fuel within weeks because most of its jet fuel imports came from the Middle East. The region had to look to international markets to secure alternative supplies.
“If prices remain higher for longer this summer, we expect that some of our competitors in Europe will face real financial difficulties,” O’Leary told CNBC Ben Boulos at the Norges Bank Investment Management Conference in Oslo in May.
“We can guarantee people that there will be no price increases, no fuel hedging and no fuel surcharges, regardless of what happens to summer supply,” he added.
