Ryanair warns of profit uncertainty as Iran war weighs on fares

Ryanair Holdings PLC on Monday reported a sharp rise in annual profit but warned it is too early to provide profit guidance for the new year, as the conflict in the Middle East has clouded its outlook.

The Dublin-based budget carrier said pretax profit jumped 36% to €2.42 billion in the 12 months to the end of March from €1.78 billion a year prior.

Total operating revenue climbed 11% to €15.54 billion from €13.95 billion, while total operating expenses rose 6.3% to €13.17 billion from €12.39 billion.

Diluted earnings per share for the year increased 40% to €2.04 from €1.45.

Higher revenue was supported by a 4.1% rise in traffic to 208.4 million passengers, up from 200.2 million a year prior.

‘With all 210 B-8200 ’Gamechangers’ now delivered, other income fell reflecting significantly lower delivery delay compensation in [financial 2026],’ said Chief Executive Officer Michael O’Leary.

Ryanair included an exceptional €85 million provision covering around 33% of the €256 million fine from the Italian Competition Authority, AGCM.

CEO O’Leary said Ryanair’s lawyers are ‘confident’ that the ‘baseless’ fine will be overturned on appeal.

‘The conflict in the Middle East has created economic uncertainty and we still don’t know when the Strait of Hormuz will reopen. Despite this, Europe remains relatively well supplied with jet-fuel, with significant volumes sourced from West Africa, the Americas and Norway,’ O’Leary added.

Ryanair said its ‘conservative’ jet-fuel hedging strategy will insulate group earnings in the volatile oil markets and ‘widen the cost advantage’ over EU competitors.

The airline said its year-end fleet of 647 aircraft should facilitate around 4% traffic growth to around 216 million in financial 2027.

‘Demand (despite the current Middle East conflict) remains robust, although the booking window is closer-in than last year,’ O’Leary said.

Ryanair noted that the price of its unhedged 20% of jet fuel requirements has spiked due to the conflict, while EU environmental taxes are expected to rise by a further €300 million in financial 2027 to €1.4 billion.

With the first week of Easter falling into March, the firm said it expects first quarter fares for financial 2027 to be behind the previous year, which included a full Easter.

Second quarter pricing, from July to September, is now trending flat, but was previously forecast to rise.

‘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,’ the company said.

‘With zero second half visibility and significant fuel price/potential supply volatility it is far too early to provide any meaningful [financial 2027] profit guidance at this time,’ Ryanair said.

The company warned that the final outcome for the year remains ‘heavily exposed’ to adverse external developments, including conflict escalation in the Middle East and Ukraine, risks to fuel supply shortages, higher for longer fuel prices, macroeconomic shocks and European air traffic control strikes.

‘We hope to be able to give shareholders a clearer picture on [first half] pricing and fuel costs during our Q1 results release in late July,’ CEO O’Leary added.

Ryanair said it has started discussions with O’Leary on an extension of his employment contract to April 2032. It is currently set to end in 2028.

The firm said the discussions have almost concluded. Under the proposed new contract, O’Leary will have a purchase option over 10 million shares, struck at market price before the Iran war related decline.

These options will only be exercisable if ‘very ambitious’ profit or share price growth targets are achieved.

Chair Stan McCarty and Senior Independent Director Roisin Brennan have agreed to remain on the board until September 2029 and 2030 respectively.

Shares in Ryanair were down 2.9% at €21.39 on Monday morning in Dublin.

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