Ryanair profit slides 34% on Middle East crisis, fare cuts

Ryanair Holdings Plc (RYAAY) reported a 34% drop in first-quarter profit on Monday, blaming the Middle East conflict for pushing consumers to delay bookings and forcing the carrier to cut fares.

Profit after tax for the three months through June came in at €538 million ($615.3 million), down from €820 million a year earlier. Ticket fares fell 6% in the quarter, and operating costs climbed 11% to €3.81 billion. In the same period, the price of the 20% of fuel the carrier leaves unhedged more than doubled.

"Q1 fares required stimulation as the Middle East conflict led to consumer hesitancy, concerns about EU jet-fuel shortages, economic uncertainty and later bookings," Chief Executive Michael O'Leary said.

Ryanair has 80% of its 2027 jet fuel hedged at $67 a barrel. It has 15% of its 2028 fuel hedged at $85 a barrel. O'Leary called the policy "conservative" and said it insulates the carrier from oil-price volatility.

"It gives us a cost advantage over all other EU competitors," O'Leary said. Unprofitable carriers, he added, "face a difficult winter."