Ryanair Profit Falls 34% as Ticket Prices Likely to Be Slightly Cheaper

Irish low-cost airline Ryanair reported a 34% decline in pre-tax profit for the period from April to June. The company indicated that ticket prices this summer could be slightly lower than last year, as travelers hesitate to book flights due to geopolitical uncertainty.

Jet fuel prices have risen sharply following the start of military operations by Israel and the United States against Iran. Although Ryanair had secured hedging agreements for part of its fuel, the cost for the remaining portion has more than doubled. In mid-July, crude oil prices reached $90 per barrel before falling slightly. Traffic through the Strait of Hormuz, a critical chokepoint for global oil shipments, was temporarily halted.

Ryanair's Chief Financial Officer Neil Sorahan noted that popular Mediterranean destinations remain sold out, and people still want to travel despite uncertainty. However, bookings are being made much closer to departure dates. Russ Mould, investment director at AJ Bell, said Ryanair is in a better position than its competitors, but overall visibility is poor. He added that the resumption of hostilities in the Middle East adds further challenges for the aviation industry.

Ryanair warned that its full-year results will be impacted by external factors, including conflicts in Ukraine and the Middle East, as well as fuel costs for which it has not secured hedging.