Full Breakdown
Ryanair’s Q1 Profit Slump Tied to Middle-East Conflict
7/20/2026, 8:20:57 PM
Core Event
In the April-June quarter Ryanair reported a sharp earnings decline linked to the war in the Middle East. Profit after tax fell to €538 million (CNBC) – a 34 % drop from the prior year – while pre-tax profit was reported as €593 million (BBC). Revenue ticked up 1 % to €4.4 billion, passenger numbers rose 6 % to 6.1 million, but average fares fell 6 % as the airline cut prices to spur demand. Operating costs rose 11 % to €3.81 billion, driven by a more-than-double increase in the portion of fuel not covered by hedges.
Conflict-Driven Fuel Costs and Consumer Hesitancy
Jet-fuel prices surged after the United States and Israel launched strikes against Iran in February, pushing crude above $90 per barrel and halting traffic through the Strait of Hormuz. Ryanair said 20 % of its fuel was unhedged and exposed to price spikes, while 80 % of 2027 fuel and 15 % of 2028 fuel are hedged at $67 and $85 per barrel, respectively. The airline warned that “results for the year will be highly sensitive to external factors such as conflict escalation in the Middle East and Ukraine” and that “summer fares … are expected to be modestly lower than last year” because travelers are booking later and showing “consumer hesitancy.”
Official Statements & Responses
CEO Michael O'Leary emphasized the airline’s “conservative hedging policy” as a “cost advantage over all other EU competitors,” arguing it shields Ryanair from oil-price volatility. CFO Neil Sorahan noted that “people are as keen to get away as ever, albeit booking just a little bit later,” and highlighted full flights on Mediterranean routes. Analyst Russ Mould (AJ Bell) warned that “visibility is worse than San Francisco airport when the fog sets in,” underscoring the uncertain outlook.
Verbatim Quotes
- “Q1 fares (which benefitted from a full Easter during April 2025) required stimulation as the Middle East conflict led to consumer hesitancy, concerns about EU jet-fuel shortages, economic uncertainty and later bookings,” — Michael O'Leary, CEO
- “People [are] as keen to get away as ever, albeit booking just a little bit later,” — Neil Sorahan, CFO
- “visibility is worse than San Francisco airport when the fog sets in” — Russ Mould, investment director, AJ Bell
- “The longer the strait remains closed and the war escalates, the greater the risk that oil prices will have to rise to around $150 a barrel to bring demand down to match the hit to supply.” — Shane Oliver, head of investment strategy, AMP
Conflicting Reports & Gaps
Sources differ on the profit metric: CNBC cites €538 million profit after tax, while the BBC reports a €593 million pre-tax profit decline. Both agree on a 34 % drop and on the impact of unhedged fuel costs, but the exact profit figure remains unclear. No further breakdown of regional revenue or detailed passenger-segment data was provided.
