Ryanair warns fuel could lift Europe fares

Ryanair said on May 18 that fare growth it had expected for the peak summer season was now “trending broadly flat,” as higher oil prices, fears of fuel shortages and weaker consumer confidence hit bookings. The warning came with the airline’s full-year results, which showed record profit after tax of 2.26 billion euros for the year ended March 31, up from 1.61 billion euros a year earlier. Michael O’Leary, Ryanair’s group chief executive, said the Middle East conflict had created “economic uncertainty” even though Europe remained supplied with jet fuel from alternative sources. The company said it was too early to give meaningful profit guidance for fiscal 2027 because of fuel-price volatility and limited visibility on second-half demand. ### Why is Ryanair talking about fares and fuel at the same time? Ryanair linked the two on May 18 in its earnings statement, saying recent pricing had “eased somewhat” because travelers were reacting to higher oil prices, the fear of fuel shortages and the risk that inflation could hurt spending. The airline said the July-to-September quarter, which it had earlier expected to show low-single-digit fare gains, was now broadly flat. (corporate.ryanair.com) Global jet-fuel spot prices have risen to more than $150 a barrel, according to Ryanair’s statement, after disruption tied to the conflict in the Middle East. O’Leary said the company still did not know when the Strait of Hormuz would reopen, though he also said Europe was relatively well supplied with fuel from West Africa, the Americas and Norway. (investor.ryanair.com) ### If fares are flat now, where is the pressure on ticket prices? The pressure sits in airline costs rather than in current booking data. Ryanair said 80% of its fiscal 2027 jet-fuel needs are hedged at about $67 a barrel through April 2027, which limits the immediate hit to its own earnings. But the remaining 20% is exposed to current market prices, and the company said elevated fuel could still push its unit costs higher by a mid-single-digit percentage if those levels persist. (corporate.ryanair.com) Bloomberg reported on May 18 that Ryanair had warned of rising costs this year if unhedged fuel prices stayed at current levels. Ryanair said its hedging position would widen its cost advantage over European rivals that are more exposed to unhedged jet fuel, aircraft lease costs and financing costs. (investor.ryanair.com) ### Does Ryanair expect an actual fuel shortage in Europe this summer? Ryanair said last week that it did not expect disruption to jet-fuel supplies in Europe during the summer months. On May 18, the company repeated that Europe remained relatively well supplied even as spot prices stayed high. O’Leary said suppliers had adjusted by drawing volumes from outside the Middle East. (bloomberg.com) Bloomberg reported on April 28 that O’Leary had become “increasingly less concerned” about Europe running short of jet fuel as production from the United States, North Africa and Norway helped replace lost flows. That left Ryanair describing the main risk as price and consumer demand rather than a widespread operational shutdown. (logistics.maritimeprofessional.com) ### What does this mean for travelers booking Europe trips now? July-to-September fares are the key data point in Ryanair’s update. The airline said prices for that quarter are now broadly flat, not rising as previously expected, which suggests travelers may still find lower-than-expected short-haul fares in the near term. Any later increase would depend on whether airlines pass through higher fuel costs as the summer progresses. (bloomberg.com) Ryanair itself did not say a fare increase was certain; it said visibility was low. Reuters reported on April 28 that O’Leary had already told the news agency Ryanair’s average fares for the year to March 2027 could be flat rather than up 4% to 5%, depending on how the Middle East conflict evolved. That earlier warning matches the weaker booking and pricing picture the airline described on May 18. (economictimes.indiatimes.com) ### What else did Ryanair report alongside the warning? Ryanair reported 208.4 million passengers for fiscal 2026, up 4%, on revenue of 15.54 billion euros, up 11%. Operating costs before exceptional items rose 6% to 13.09 billion euros, while unit costs rose 1%, the company said. The results included an 85 million euro provision tied to an Italian competition fine that Ryanair said it expects to overturn on appeal. (uk.marketscreener.com) September is the next dated milestone in the company’s results statement: Ryanair said a final dividend of 0.195 euro per share is payable then, subject to annual meeting approval. Before that, investors and travelers will be watching July-to-September pricing and any update Ryanair gives on fiscal 2027 profit guidance. (corporate.ryanair.com)