Ryanair warns flat fares may weigh on profits

Ryanair has warned investors that annual profits look set to be pressured by effects from the US-Iran war.

Europe's largest airline by passenger numbers said on Monday that economic uncertainty was likely to wipe out any growth in fares during its peak summer months.

It had previously predicted low single-digit growth in fare costs but said in its annual results statement covering 2025-2026: "Pricing in recent weeks has eased 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."

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Ryanair, which has consistently reassured customers that it sees no disruption to schedules on the jet fuel issue, gave no guidance on profits for its current financial year.

Pricing for the key July-to-September quarter had turned flat, the no-frills carrier said.

"With zero H2 visibility and significant fuel price/potential supply volatility it is far too early to provide any meaningful FY27 profit guidance at this time," it stated.

Ryanair, like rivals, has been grappling the fallout from the effective closure of the Strait of Hormuz waterway by Iran during the conflict to date, which has disrupted usual flows of oil and refined products, including jet fuel.

"The conflict in the Middle East has created economic uncertainty and we still don't know when the Strait of Hormuz will reopen," Ryanair's statement continued.

"Despite this, Europe remains relatively well supplied with jet fuel, with significant volumes sourced from West Africa, the Americas and Norway.

"Global jet fuel spot prices have, however, spiked to over $150bbl and are expected to remain elevated versus pre-conflict levels for some months.

"Ryanair's conservative jet fuel hedging strategy (80% of FY27 jet fuel is hedged at approx. $67bbl - to April 2027) will insulate Group earnings in the current very volatile oil markets and widen the cost advantage over EU competitors for the remainder of FY27."

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Ryanair's results for the year to March 2026 showed a 40% lift in its key after-tax profit (PAT) measure.

The sum of €2.26bn (£1.97bn) was slightly higher than analysts had predicted.

Ryanair also disclosed that discussions with group boss Michael O'Leary (MOL) over a new employment contract, which would take his planned term to 2032, had "almost concluded".

"Under the proposed new contract, MOL will have a purchase option over 10m shares struck at market price (before the recent Iran war related decline), but (similar to his 2019 grant) these options will only be exercisable if very ambitious PAT or share price growth targets are achieved, which will create substantial value for all shareholders.

"A further update will be provided in due course," the statement added.

Ryanair shares fell 4% at the market open.

Conroy Gaynor, consumer analyst at Bloomberg Intelligence, said of its update: "Ryanair's weaker fares commentary suggests net income consensus for the fiscal year ending March 2027 could fall by a double-digit percentage despite its 4Q26 beat and better fuel hedging than peers.

"A later bookings curve since the Iran war appears to be adding to demand risk for the key summer period, while environmental costs and a spike in unhedged fuel price add further margin pressure."

(c) Sky News 2026: Ryanair warns flat fares may weigh on profits