Ryanair sees fares and costs under pressure due to Iran war

By Holly Williams, Press Association Business Editor

Budget airline Ryanair has cautioned over rising costs from soaring fuel prices and said consumer uncertainty caused by the Iran war is keeping fares under pressure.

The Irish carrier said air fares had weakened in recent weeks in response to the Middle East conflict, with expectations for prices to be down by a mid-single digit percentage in its first quarter to the end of June.

It also cut its outlook for summer fares, saying it now sees the pricing trend remaining “broadly flat” between July and September, having previously expected a low single-digit increase over the peak season.

Ryanair chief executive Michael O’Leary said: “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 group said while it has secured pricing for 80 per cent of its jet fuel needs, the cost of the remaining 20 per cent has “spiked” due to the Middle East conflict and cautioned if prices remain where they are, then its costs could jump by a “mid-single digit” percentage in 2026-27.

Ryanair posted a 40 per cent rise in underlying after-tax profits to €2.26 billion for the year to March 31st, which is slightly better than expected.

Pre-tax profits rose 36 per cent to €2.42 billion.

But the group said it was “far too early” to give an outlook for the new financial year given the uncertainty over demand and fuel prices.

O’Leary said European airlines were sourcing their jet fuel from alternative countries to overcome the supply shock caused by Iran’s blockade of the crucial Strait of Hormuz.

He said: “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.”

Like other airlines, the group said bookings were increasingly being made at the last minute, though it said demand remained “robust”.

It is expecting to fly four per cent more passengers over the year to March 2027, at 216 million, matching the four per cent growth it saw in 2025-26.

Ryanair added the board and O’Leary was close to finalising the terms of his contract extension, for another four years from the end of March 2028, with a proposal for the chief executive to be granted 10 million shares awards, which will be dependent on “very ambitious profit after tax or share price growth targets”.

“These discussions have almost concluded and engagement with the group’s largest institutional shareholders will commence in the coming days,” it said.