Ryanair profits drop as Iran war puts off passengers and lifts fuel costs

What the report says

BBC World News reports that Ryanair’s quarterly profit fell sharply after the war in the Middle East pushed up fuel costs and made some customers slower to commit to travel. The Irish low-cost carrier said pre-tax profit for April to June declined 34% to €593m (£503m), while revenue edged up 1% to €4.4bn. The airline cut fares to support demand, leaving average fares down 6% even as passenger traffic increased.

According to the BBC, Ryanair linked the pressure to higher oil and jet fuel prices following US and Israeli strikes on Iran in February and renewed fighting after peace talks faltered. Crude prices briefly reached about $90 a barrel on Monday, and disruption around the Strait of Hormuz has added concern because the route is important for global oil and gas shipments. Ryanair said most future fuel costs were hedged, but the portion not covered by those arrangements had more than doubled.

The airline now expects fares in the July-to-September summer period to be modestly below last year, citing consumer caution and later booking patterns. Finance chief Neil Sorahan said popular Mediterranean routes remained full, suggesting demand has not disappeared but has become more hesitant. Ryanair’s shares fell 5% on Monday after the update.

The results matter because Ryanair is one of Europe’s largest budget airlines and is often seen as a gauge of leisure travel demand. The company warned that its full-year performance remains highly exposed to external risks, including any escalation in the Middle East or Ukraine and the cost of jet fuel not already fixed through hedging.