Ryanair Q1 Profit Falls 34% to €538m as Unhedged Fuel Costs Rise

Ryanair has reported a 34% fall in profit after tax for the first quarter of its 2027 financial year, as higher unhedged jet-fuel prices and lower average fares affected the airline group’s performance.

Profit after tax fell to €538m for the quarter ending June 2026, compared with €820m during the corresponding period last year.

Ryanair said the result reflected a spike in the price of the 20% of its jet fuel that remained unhedged, while average fares declined by 6%.

The airline also attributed the lower fares to the impact of the conflict in the Middle East and the timing of the Easter holidays, with the first part of Easter 2026 falling into the fourth quarter of Ryanair’s previous financial year.

Passenger traffic increased by 6% during the quarter, rising from 57.9 million to 61.3 million passengers. Ryanair’s load factor remained unchanged at 94%.

Total revenue increased by 1%, from €4.34bn to €4.38bn, while operating costs rose by 11%, from €3.42bn to €3.81bn.

Lower Fares and Higher Fuel Costs

Revenue per passenger declined by 5%, reflecting the 6% reduction in average fares and flat ancillary revenue per passenger.

Scheduled revenue fell by 1% to €2.91bn, despite the increase in passenger numbers, as Ryanair stimulated demand through lower fares.

The comparative prior-year quarter benefited from the full Easter holiday period falling in April 2025. During the latest quarter, Ryanair said fares required stimulation as the conflict in the Middle East contributed to consumer hesitancy, concerns about possible EU jet-fuel shortages, economic uncertainty and later bookings.

Ancillary revenue increased in line with passenger traffic to €1.47bn.

Unit costs rose by 5% as the price of Ryanair’s unhedged jet fuel doubled to approximately $150 per barrel during the quarter.

Operating costs were also affected by the cessation of supplier compensation following the delivery of Ryanair’s final Boeing 737-8200 “Gamechanger” aircraft in February 2026.

Ryanair’s fuel requirements for FY27 are currently 80% hedged at approximately $67 per barrel. The airline has also extended its fuel-hedging programme into FY28, which is now 15% hedged at approximately $85 per barrel.

The group said its conservative hedging policy would help insulate earnings during periods of oil-price volatility and widen its cost advantage over other European airlines.

Ryanair Says Group Is Now Debt Free

Ryanair said its balance sheet was supported by an unencumbered Boeing 737 fleet of 620 aircraft, BBB+ credit ratings and strong liquidity.

Gross cash stood at more than €2.8bn as of 30 June, following €1.3bn in debt repayments and €500m in capital expenditure.

The group’s liquidity is further supported by a €1.1bn revolving credit facility, which remains mostly undrawn.

Ryanair repaid its final €1.2bn bond in May, leaving the group debt free.

The airline said its financial strength continues to widen the cost gap between Ryanair and rival carriers exposed to rising long-term finance costs, expensive aircraft leases and unhedged jet-fuel prices.

Ryanair is also approximately 90% through its €750m share buyback programme. More than 25 million shares have been purchased and cancelled at an average price of €26.35 per share.

Over the coming year, Ryanair’s funding priorities will include capital expenditure relating to its Boeing 737 MAX 10 aircraft, shareholder dividends and the completion of the current share buyback programme using internal cash flows.

The group also plans to rebuild its gross cash position to €4bn.

Fleet Grows to 647 Aircraft

Ryanair’s group fleet currently comprises 647 aircraft, including all 210 Boeing 737-8200 Gamechanger aircraft.

The fleet is expected to support a 4% increase in traffic during FY27, bringing the group’s annual passenger total to 216 million.

Boeing continues to expect certification of the Boeing 737 MAX 10 in late summer 2026 and plans to deliver Ryanair’s first 15 MAX 10 aircraft on schedule in spring 2027.

Ryanair has ordered 300 MAX 10 aircraft, which are due to be delivered by March 2034. The airline said the aircraft would provide 20% more seats while using 20% less fuel.

For summer 2026, Ryanair has opened three new bases in Rabat, Tirana and Trapani and launched 130 new routes.

With traffic expected to increase by 4% during the financial year, Ryanair said its limited capacity was being redirected towards countries, regions and airports that were cutting aviation taxes and lowering airport charges to encourage growth.

The airline highlighted Albania, Italy, Morocco, Slovakia and Sweden as examples of markets encouraging growth.

Ryanair said it was withdrawing flights and passenger traffic from higher-tax and higher-cost markets, including Austria, Dublin, Germany and regional Spain.

European Capacity Expected to Remain Constrained

Ryanair expects European short-haul capacity to remain constrained until at least 2030.

The airline cited ongoing aircraft delivery delays at the two major aircraft manufacturers, continued Pratt & Whitney engine repair delays and accelerating consolidation among European airlines.

It also warned that unprofitable airlines affected by higher jet-fuel prices and the strength of the US dollar could face a difficult winter.

Ryanair said these capacity constraints, combined with its cost advantage, balance sheet, fuel-efficient aircraft order book and operational resilience, would support sustainable and profitable growth to more than 300 million passengers annually by FY34.

Customer Satisfaction Reaches Record 91%

The group recorded a customer satisfaction score of 91% during the first quarter, an increase of two percentage points compared with the corresponding period last year and Ryanair’s highest score to date.

Ryanair said its continued investment in new technology and operational resilience, combined with its sustainable aviation fuel targets, supported its position as one of Europe’s most environmentally efficient airlines.

The group is operating 210 Gamechanger aircraft during summer 2026. These aircraft provide 4% more seats while using 16% less fuel.

Preparations are also underway for the introduction of Ryanair’s first Boeing 737 MAX 10 aircraft during the fourth quarter of FY27. The MAX 10 aircraft will provide 20% more seats while using 20% less fuel.

The airline will also complete its winglet retrofit programme across its entire Boeing 737NG fleet this winter, delivering a 1.5% reduction in fuel burn and 6% less noise.

FY27 Outlook

Ryanair expects passenger traffic to remain on track to grow by 4% to 216 million during FY27.

Traffic is expected to increase by 6% during the first half of the financial year and by 2% during the second half.

The airline said its unit-cost advantage continued to widen. With 80% of its fuel requirements hedged to March 2027 at approximately $67 per barrel, Ryanair said its earnings were partly protected from oil-price volatility.

The fuel hedging is also expected to help offset a €300m increase in European environmental taxes, significant crew pay increases under new multi-year collective labour agreements and higher maintenance costs.

However, final unit costs for FY27 will depend on the price of Ryanair’s remaining 20% of unhedged jet fuel over the final three quarters.

While summer 2026 passenger volumes remain strong, the airline said customers were continuing to book closer to their departure dates than they did last year, reducing visibility over future performance.

Despite a recent slight increase in booking volumes and a reduced requirement to stimulate demand, second-quarter pricing is currently trending modestly lower year-on-year.

The final first-half fare outcome will depend heavily on the strength of close-in bookings during August and September.

Ryanair said it currently has no visibility over the second half of the financial year and that it remains too early to provide meaningful profit-after-tax guidance for FY27.

The airline warned that its final result remains highly sensitive to external developments, including an escalation of the conflicts in the Middle East and Ukraine, the cost of unhedged jet fuel, macroeconomic shocks and continuing European air traffic control strikes and mismanagement.