Ryanair’s Q2 profit falls on Mideast war impact

Ryanair's net profit dipped 6% in the second quarter (Q2) due to soaring fuel costs stemming from the Middle East conflict, the European low-cost carrier announced on Monday. The Irish airline, which is the continent's largest by passenger numbers, reported a 6% drop in profit after tax to €1.61 billion (US$1.8 billion) for the three months ending September 30th, down from €1.72 billion a year earlier.

The chief executive, Michael O'Leary, attributed the fuel cost surge to the US-Iran war. He warned that unless the Middle East situation improves quickly, jet-fuel prices are expected to remain high until 2027.

O'Leary estimated the airline's fuel bill would rise by €2 billion in the next fiscal year, potentially prompting cost-cutting measures like temporary pay freezes, reduced cabin crew ratios, and increased use of artificial intelligence in back-office operations. Passenger numbers grew by 5% in Q2, but fares fell by 2% as consumers became more hesitant to book due to the ongoing war. Revenue for the quarter rose 4% to €5.7 billion.

O'Leary cautioned that providing full-year profit guidance remains challenging, emphasizing that it is still highly sensitive to conflict escalation in the Middle East and Ukraine, fuel prices, economic shocks, and European air traffic control strikes. The airline had previously announced plans to reduce its winter schedule in response to higher fuel costs.