The crisis in Hormuz comes at the expense of Ryanair, which earns 34% less despite increasing passenger traffic

Ryanair has recorded a net profit of 538 million euros during the first quarter of its fiscal year 2027, which ended in June. This represents a 34% decline compared to the same period in the previous fiscal year. The airline's profits have been impacted by rising fuel costs and traveler uncertainty caused by the conflict between the United States and Iran. Despite transporting 6% more passengers than the prior period, Ryanair’s revenue per passenger has dropped by 6%. Additionally, the absence of Easter, which typically boosts travel demand, in this quarter further contributed to the drop in profitability. The company transported 61.3 million passengers during the first quarter, and it has taken steps to hedge against volatile oil prices by securing 80% of its fuel requirements for the entire 2027 fiscal year at approximately $67 per barrel. For the 2028 fiscal year, Ryanair has covered 15% of its fuel needs at $85 per barrel. These measures aim to enhance competitiveness by reducing operating costs relative to other airlines. In May 2026, Ryanair repaid 1.2 billion euros in debt and made capital investments totaling 500 million euros. As of June 30, the company’s cash reserves exceeded 2.8 billion euros. However, operational costs rose by 11% to 3.81 billion euros due to a sharp increase in the price of uncovered aviation fuel, according to the company’s statement. Ryanair has also completed approximately 90% of its 750 million euro share buyback program, equivalent to over 25 million shares at an average price of 26.35 euros. Although the company acknowledges that forecasting for the full 2027 fiscal year remains challenging due to instability surrounding the U.S.-Iran agreement on the Strait of Hormuz and fluctuating fuel prices, early estimates suggest Ryanair is on track to grow traffic by 4% and reach 216 million passengers. With this projected capacity, Ryanair plans to direct its growth toward countries with lower aviation tax rates, such as Albania, Italy, Morocco, Slovakia, and Sweden. At the same time, the airline intends to reduce operations in regions with higher taxes and costs, including Austria, Dublin, Germany, and parts of Spain. Ryanair continues to navigate the challenges posed by geopolitical tensions and economic pressures, adjusting strategies to maintain profitability while expanding its market presence. The airline remains focused on optimizing costs and leveraging its competitive advantages in markets where regulatory burdens are lighter. As the situation in the Middle East evolves, Ryanair will likely continue to monitor developments closely and adapt its approach accordingly.