Ryanair announced plans to increase fares and implement a cost-cutting drive next year to offset soaring jet fuel prices linked to the Middle East conflict, the airline said in a statement Tuesday. Chief Executive Michael O'Leary said the airline's fuel bill is expected to rise by €2 billion in its next financial year, with only a quarter of 2027-28 needs currently hedged at around $95 a barrel. For its current financial year, Ryanair has hedged 80% of its fuel needs at around $67 a barrel, well below current market levels.
Profit after tax fell 6% to €1.61 billion in the second quarter, or three months to end-September, from one year earlier, the carrier said. Revenue increased 4% to €5.7 billion. While passenger traffic grew 5%, fares fell 2% as the war led to consumer hesitancy and later bookings.
O'Leary said double-digit percentage fare increases across Europe in 2027 are likely. "We're certainly looking at double-digit (percentage) fare increases across Europe from all airlines in 2027," he said in a video released alongside the second-quarter earnings.
Ryanair already announced it would reduce its winter schedule in response to higher fuel costs. The airline expects to carry 214 million passengers in its current fiscal year, up 3% from 2025/26.
"Unless there is a swift resolution of the Middle East conflict, we expect jet fuel prices to remain elevated well into 2027," Mr O'Leary said.
Chief Financial Officer Neil Sorahan said he expected demand to remain strong next year and that an extra €5 or €10 on a Ryanair airfare won't necessarily dampen people's willingness to travel. This week's US midterm elections and peace talks aimed at ending the US-Israeli war on Iran might open up opportunities for more fuel hedging with oil prices nearing a one-week low.
Ryanair shares rose in Dublin trade following the announcement.
