Ryanair profit slumps 34% as fuel costs surge on Iran war

Ryanair reported Q1 profit after tax of €538 million, down 34% from a year earlier, as unhedged fuel costs jumped and ticket fares fell.

"Higher fuel prices from the Middle East conflict, combined with softer pricing in some markets, created a challenging operating environment," Chief Financial Officer Neil Sorahan said.

The Dublin-based carrier's profit missed analyst expectations. The Iran war pushed Brent crude above $90 a barrel, raising jet fuel costs that Ryanair had not hedged against. The airline also cited declining average fares as capacity increases across Europe pressured pricing.

The €538 million compares with €815 million a year earlier, a 34% decline. In dollar terms, the result was $615.3 million. Ryanair did not disclose revenue, earnings per share, or full-year guidance.

European carriers including Wizz Air and easyJet have also flagged margin pressure from fuel costs and pricing weakness. The broader sector faces a potential consolidation wave if current conditions persist through winter, analysts at Goodbody said.

The airline industry now faces what executives describe as a "difficult winter," with fuel costs expected to stay elevated and consumer demand uncertain. Ryanair's policy of minimal hedging left it fully exposed to spot price increases, while competitors with hedged positions have been better insulated.

The profit miss shows that Ryanair's low-cost model offers limited protection against geopolitical fuel shocks. Investors will watch the carrier's hedging strategy update at its H1 results in November for any policy changes.

This article is for informational purposes only and does not constitute investment advice.