This photo shows the plane of the Irish low-cost airline Ryanair parked at the airport of Thessaloniki “Makedonia”, in Thessaloniki on May 7, 2026.
Sakis Mitrolidis Afp | Getty Images
Ryanair warned on Monday that Europe’s struggling airlines face a “difficult winter” ahead, as the budget carrier reported a 34% drop in first-quarter profits as consumers delayed bookings amid the Middle East crisis.
The airline saw its profit after tax in the April to June quarter fall to 538 million euros ($615.3 million), down from 820 million euros a year earlier.
Ryanair said 20% of fuel savings were exposed to price increases, while fares fell by 6%. Operating expenses also rose 11% to 3.81 billion euros as the price of its 20% uncapped fuel more than doubled in the quarter.
Shares were last seen down 6.8%. The stock is up about 5% this year.
The company’s 2027 jet fuel is currently hedged at $67 per barrel, and 15% hedged in 2028 at $85 per barrel.
“Q1 fares (which benefited from a full Easter in April 2025) need to be encouraged as the conflict in the Middle East has led to consumer skepticism, concerns about EU jet fuel shortages, economic uncertainty and later bookings,” said Ryanair CEO Michael O’Leary.
O’Leary added that the company’s “conservative hedging policy” protects it from oil price volatility as the Middle East turmoil continues, giving it a “cost advantage over all other EU competitors,” while “unprofitable airlines face a tough winter.”
Travelers were eager to book their summer vacations at the start of the war, forcing Ryanair to lower fares, which means that despite the increase in traffic, revenue is still holding, John Strickland, aviation analyst and director of JLS Consulting, explained on CNBC’s “Squawk Box Europe” on Monday.
“We did [got] more than 715,000 people fly with us today,” Ryanair CFO Neil Sorahan said on CNBC’s “Squawk Box” Monday. “There is no shortage of bookings. There is no shortage of people going. They just book to get a little closer.
“I think there was doubt at the beginning of the first quarter, when there were concerns about fuel supply. We all know that’s not the problem. Plenty of fuel to get people out and back home. It’s just a good price for buyers in the market right now.”
Ryanair has issued conservative guidance for the longer term of its financial year, as operating costs are heavily dependent on the amount of jet fuel not held. Meanwhile, profit after tax remains “highly sensitive” to global developments, including rising conflicts in the Middle East and Ukraine, the company said.
“Despite a slight increase in volumes, and less price promotion, Q2 fares are trending slightly lower (yoy), and the final outcome of H1 fares is highly dependent on booking capacity around Aug. and September,” O’Leary said. “As usual this early in the year, we don’t have H2 visibility, so it’s too early to provide any meaningful FY27 PAT guidance.”
Winter ‘failure’ is coming
CFO Sorahan noted that the conflict in the Middle East will lead to “a lot of movement” in Europe’s weak airlines.
“There are a lot of carriers out there that don’t have the cost base that Ryanair has, they don’t have the balance sheet,” Sorahan said. “We paid off our last bond, $1.2 billion, in May, so now we have no debt, and we own all the assets.”
“So I think as you go into the winter period, some of the weaker carriers will find it more difficult, and we could see a number of failures over the next few months,” Sorahan continued.
The average price of jet fuel rose to $127 a barrel in the week ending July 10, up 41% from a year ago, according to the International Air Travel Association’s Jet Fuel Price Monitor.
At the time, the International Energy Agency warned that Europe could run out of jet fuel within weeks, as most jet fuel exports come from the Middle East. The region has had to look to international markets for alternative supplies.
JLS’s Strickland noted that several small flights have failed in recent weeks, with winter bringing more pressure for cancellations to fail.
“I would expect to see more severe write-offs in the weak winter season this year than we’ve seen in a long time for all types of aircraft if fuel prices stay high.”
Chief executive O’Leary said in April: “We can guarantee people that there will be no price hikes, no fuel hedging, no fuel surcharges, no matter what happens with the summer supply,” he added.
Strickland said the company is benefiting from an “active fare system,” which means selling seats at lower prices, while expecting passengers to use more services.
“Yes, any passenger on the seat, even if the actual price of the ticket is low, they will spend something, maybe just a cup of coffee on board, but it could be an extra bag, or buying a rental car with Ryanair. So that’s a big driver, about 20- 25% or more of the company’s revenue,” said Strickland.
