Ryanair Holdings (cdi) (LON:0RYA) reported first-half profit after tax of €2.15 billion, down 15% from €2.54 billion a year earlier, as lower fares and a sharp increase in unhedged fuel costs outweighed a 6% increase in passenger traffic.
Group CEO Michael O’Leary said traffic rose to 125.8 million passengers in the six months ended Sept. 30, while average fares declined 4%. Revenue per passenger fell 3%, and total revenue increased 3% to just under €10.1 billion, according to Group CFO Neil Sorahan.
O’Leary attributed the weaker fare performance partly to Easter timing, as April did not include a full Easter travel period, and to the Middle East conflict, which he said contributed to consumer hesitancy and later bookings. The company used fare stimulation, particularly in the first quarter, to support demand.
Fuel Costs Pressure First-Half Earnings
Operating costs increased 10% to €7.69 billion. Ryanair said the main driver was the doubling in the price of its 20% unhedged jet-fuel requirement, which reached about $130 per barrel, compared with the company’s hedged fuel price of $67 per barrel.
Unit costs rose 5%, with O’Leary saying nearly all of the increase was related to fuel. Supplier compensation also ceased after delivery of the final Boeing 737-8200 “Gamechanger” aircraft in spring 2026.
For fiscal 2027, Ryanair said it is 80% hedged for jet fuel at $67 per barrel through March. It has also extended fiscal 2028 fuel hedging, with 25% of expected requirements covered at $95 per barrel. The company said fiscal 2027 operating expenses are 80% hedged at a $1.16-to-euro exchange rate, while fiscal 2028 operating expenses are 21% hedged at $1.19 to the euro.
Despite the protection from current-year hedges, management said elevated fuel prices could materially increase the airline’s fiscal 2028 fuel bill. O’Leary estimated Ryanair could face a roughly €2 billion, or one-third, increase in its fuel bill next year if the Middle East conflict is not resolved and low-cost hedges roll off.
Traffic Target Reduced as Winter Capacity Stays Flat
Ryanair reduced its fiscal 2027 traffic target to 214 million passengers from 216 million previously. The change removes 2 million passengers from its winter plan, leaving traffic broadly flat year over year between November and March.
The company said it would direct limited capacity toward countries, regions and airports that reduce aviation taxes or airport charges. Management identified Albania, Italy, Morocco, Slovakia and Sweden as growth markets, while saying it was moving flights away from higher-cost markets including Austria, Belgium, Germany and regional Spain.
For fiscal 2028, Ryanair expects to carry more than 220 million passengers, aided by the planned arrival of 16 Boeing 737 MAX 10 aircraft for summer 2027. The company said the U.S. Federal Aviation Administration certified the MAX 10 in October and that it expects European Union Aviation Safety Agency certification by the end of December.
The first MAX 10 deliveries are expected between January and April 2027. Ryanair said the aircraft will provide 20% more seats and consume 20% less fuel, supporting its plan to grow annual traffic to 300 million passengers by fiscal 2034.
Balance Sheet and Shareholder Returns
Ryanair ended the half with €2.6 billion of gross cash and a further €700 million available under its revolving credit facility. The company said the cash position followed €1.3 billion of debt repayments, €800 million of capital expenditure and €400 million of shareholder distributions during the period.
Sorahan said Ryanair’s BBB+ credit ratings from Fitch and S&P are supported by 620 debt-free and unencumbered Boeing 737 aircraft. The company expects fiscal 2027 capital expenditure to remain close to €2 billion.
The board declared an interim dividend of €0.273 per share, payable in late February 2027. Ryanair also announced a new €800 million share repurchase program set to begin in February and run for about 10 months through December 2027. The company completed a €750 million buyback in September and said it has retired more than 40% of its issued share capital since 2008.
Outlook Remains Dependent on Fuel and Bookings
Management said third-quarter demand has been strong, with fares recently trending modestly ahead of the prior year. However, it said the booking window remains close to departure, making the final outcome dependent on bookings during school breaks and the Christmas and New Year travel period.
Ryanair said it has almost no visibility into the fourth quarter and therefore did not provide fiscal 2027 profit-after-tax guidance. Sorahan said second-half unit costs will depend largely on unhedged fuel prices, as well as crew pay increases, maintenance timing and the effect of spreading costs over a lower traffic target.
Looking ahead, management expects constrained European short-haul capacity and higher airline fuel costs to lead to materially higher fares in 2027, though it does not expect fare increases to fully offset Ryanair’s projected fuel-cost increase. The company said it is reviewing expenses across the group, including airport charges, financing costs, labor agreements, crewing ratios and greater use of artificial intelligence in operating and support functions.
About Ryanair Holdings (cdi) (LON:0RYA)
Ryanair Holdings plc is a major European airline group known for operating low-fare passenger air services. Through its airline operations, the company provides scheduled flights across a broad network of domestic and international routes, serving leisure and business travelers throughout Europe and beyond.
The company is best known for its low-cost model, which centers on short-haul air travel and high aircraft utilization. In addition to passenger transport, Ryanair also offers ancillary services such as reserved seating, priority boarding, checked baggage, and onboard sales, which form an important part of its overall business.
Ryanair Holdings was founded in 1984 and grew from a small Irish airline into one of Europe’s largest carriers.
