Ryanair slips in Dublin; first-quarter performance disappoints
The airline’s results have been affected by lower airfares and rising fuel costs following the conflict in the Middle East
(Il Sole 24 Ore Radiocor) - A turbulent start to the week for Ryanair on the Dublin Stock Exchange due to a sharp fall in profits in the first quarter of the financial year, driven by lower airfares and rising fuel costs following the conflict in the Middle East.
Ryanair reported a net profit of €538 million for the quarter ending in June, down 34% from the €820 million recorded in the same period last year. Turnover stood at €4.38 billion, up 1 per cent, compared with the €4.48 billion expected by analysts. Ancillary revenue, which includes services such as baggage fees and in-flight meals, totalled €1.47 billion (+5%), whilst transport revenue fell by 1% to 2.9 billion, as traffic grew by 6% but fares fell by 6%, the company explains. “First-quarter fares (which had benefited from a full Easter period in April 2025) required a boost as the conflict in the Middle East led to some consumer hesitation, concerns over jet fuel shortages in the EU, economic uncertainty and postponed bookings’, Ryanair states. Operating costs rose by 11% to €3.81 billion “as the price of our unhedged aviation fuel, accounting for 20% of the total, more than doubled in the first quarter, whilst supplier compensation ceased following the delivery of our final B-8200 Gamechanger in February 2026.”
The airline carried 61.3 million passengers in the first quarter; revenue per passenger fell by 5 per cent, whilst the load factor – which measures aircraft occupancy – remained at 94 per cent. Ryanair has indicated that traffic forecasts for the 2027 financial year remain in line with 4 per cent growth to 216 million passengers, but that ‘second-quarter fares show a slight downward trend year-on-year’. Furthermore, ‘there is zero visibility on the second half of the year and it is therefore premature to provide full-year profit guidance’. The airline had already issued a warning to this effect in May. Pre-tax profit, Ryanair adds, “remains highly sensitive to adverse external developments, such as an escalation in the Middle East and Ukraine, the price of fuel not covered by hedging, macroeconomic shocks, and strikes and poor management of European air traffic”.
Ryanair has fallen short of expectations with its first-quarter results, as well as with its fare forecasts for the current quarter, according to a note from Morgan Stanley analysts, who added that the company failed to meet MS’s consensus estimates for both turnover and net profit, falling short by 1 per cent and 16 per cent respectively. Experts at RBC Capital Markets are more optimistic, arguing that Ryanair’s low-cost, high-margin business model continues to look attractive in the long term. They also believe that the worst of the decline in fares on short-haul flights may now be behind us.
