Ryanair has said airline fare rises have fallen off as customers put off booking holidays due to fear of fuel shortages and the impact of higher inflation on their budgets.
In its annual results, the Irish budget airline said low-single-digit percentage increases in fares for the peak summer months had faded, with pricing ‘now trending broadly flat’ for the July to September period.
It said this was ‘somewhat in response to economic uncertainty caused by higher oil prices, the fear of fuel shortages and the risk of inflation adversely impacting consumer spending.’
The Irish airline carrier reported pre-exceptional profits of €2.26billion (£1.96bn) for the year to March, up 40 per cent on the previous year and ahead of City forecasts, while revenue jumped 11 per cent to €15.54billion (£13.54bn).
Passenger numbers hit a new high of 208.4million and a load factor of 94 per cent.
However, it warned that the conflict in Iran made things uncertain for the year ahead.
Ryanair boss Michael O’Leary told reporters that the airline had ‘delivered a record year, record traffic, record profits…clearly at the moment we are going through significant uncertainty.’
Ryanair boss Michael O’Leary said it had been a record year, but uncertainty over fuel prices weighed
Ryanair has suspended its annual profit guidance due to the uncertainty.
Ryanair said there was ‘zero’ visibility on fares for the second half of the year, with ‘significant’ fuel price and potential supply volatility making it ‘far too early’ to provide profit guidance.
Jet fuel costs spike
Jet fuel prices have spiked to $150 per barrel since the start of the conflict. However, Ryanair today said it had hedged 80 per cent of its fuel until April 2027 at $67.
But the cost of the remaining 20 per cent had ‘spiked’ due to the conflict and warned that if prices remain where they are, then its costs could jump by a ‘mid-single digit’ percentage in 2026-27.
The budget airline also said environmental levies and wage bills would add to costs, as it warned that weakening consumer confidence was likely to wipe out any growth in fares over the peak summer period.
Last week, Ryanair warned that its profits may come under ‘a bit of pressure’ if oil prices remain higher for longer, but did not expect a disruption to fuel supplies in Europe this summer.
In an update today, Ryanair said Europe remained ‘relatively well supplied with jet fuel,’ with significant volumes sourced from West Africa, the Americas and Norway.
Ryanair shares fell 3 per cent this morning.
Adam Vetesse, market analyst for eToro, said the update was ‘Classic Ryanair caution and possibly an overreaction.’
He continued: ‘The group’s structural cost advantage, bulging cash pile and ongoing buybacks give it huge resilience.
‘Despite being under pressure this year, at current levels the shares could look attractive for patient investors willing to take on the geopolitical risk premium.’
Meanwhile, Ryanair’s board said it was in discussions with O’Leary to extend his contract from the end of 2028 to April 2032.
This would mean he would lead Ryanair until at least the age of 71.
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