Ryanair reported a 15% drop in first-half profit to €2.15 billion as unhedged jet fuel costs doubled. Group chief executive Michael O’Leary warned that the low-cost carrier is considering temporary pay freezes, reduced flight crews, and increased use of artificial intelligence to offset an estimated €2 billion increase in its fuel bill.
First-Half Profits Fall as Unhedged Fuel Costs Double
Europe’s largest low-cost carrier reported a profit after tax of €2.15 billion for the six months ending 30 September 2026, marking a 15% decline from the €2.54 billion recorded during the same period a year earlier. While total revenue rose 3% to €10.08 billion and passenger numbers grew 6% to 125.8 million, operating costs jumped 10% to €7.69 billion. Average fares fell 4% year-on-year in the first half to €55.70, while the airline’s load factor held steady at 95%.
RYANAIR $RYAAY — PROFITS FALL 6%. BUT THE REAL RISK IS A €2 BILLION FUEL BILL.Ryanair remains profitable, but rising fuel costs could put its low-cost model under increasing pressure.THE NUMBERS — Q2 FY27🔹 Net profit: €1.61B (−6% YoY), in line with expectations.🔹 Average… pic.twitter.com/cYq2LZg2rm
Pre-tax profits fell by 16% to €2.4 billion during the six months to the end of September. Ancillary revenue increased by 6% to €3.08 billion, helping to offset some of the pressure from lower ticket prices. The profit squeeze was driven primarily by jet fuel expenses. Ryanair secured 80% of its fuel requirements for the current financial year at approximately $67 per barrel, protecting earnings from near-term oil volatility. However, the remaining 20% of its fuel requirements remained unhedged, with prices for that portion doubling to around $130 per barrel. Oil prices had hit a six-month high before falling to about $110 a barrel on Monday.
Unless there is a swift resolution of the Middle East conflict, we expect jet fuel prices to remain elevated well into 2027.
Michael O’Leary, Group Chief Executive, Ryanair
Pay Freezes, Smaller Crews, and AI Eyed to Cut Costs
Looking toward the financial year ending in March 2028, Ryanair anticipates an estimated €2 billion increase in its fuel bill as current hedging arrangements roll off. To help absorb the shock, the airline is reviewing all operating costs across group carriers, focusing on airport negotiations, maturing labour agreements, crewing ratios, and administrative productivity. Chief Financial Officer Neil Sorahan noted that the airline held €2.6 billion in gross cash and €700 million of unused credit facility, placing it in a stronger position than European rivals.
Chief Executive Michael O’Leary stated that maturing labour agreements may require temporary wage freezes beginning in April of next year. The airline is also weighing reductions in flight crew numbers where legally permissible and expanding the deployment of artificial intelligence to drive productivity across back-office and support functions.
Labour representatives pushed back against the proposals. Oliver Richardson, national officer at the Unite union, said that unions had not been advised of any such plans and emphasized that existing multi-year agreements were independent of company performance.
Our pay agreement was not attached to, nor dependent on company performance. This was something that the Ryanair was at pains to emphasise. As such we would expect it to be honoured.
Oliver Richardson, National Officer, Unite
Airfares Expected to Climb Across European Short-Haul Routes
Passengers should prepare for higher ticket prices as airlines pass on the burden of expensive fuel. O’Leary warned that short-haul airfares across Europe would rise by double-digit percentages in 2027. Dan Coatsworth, head of markets at AJ Bell, advised travellers to brace for a sharp increase in the cost of flying unless global oil prices drop substantially.
Despite the predicted fare hikes, executives believe travel demand will remain resilient. Chief Financial Officer Neil Sorahan noted that an extra €5 or €10 on an airfare would not necessarily dampen people’s willingness to travel.
Fleet Expansion and Capacity Targets for 2027
To navigate the constrained operating environment, Ryanair lowered its traffic target for the current financial year to 214 million passengers. The airline expects delivery of its first 16 Boeing 737 MAX 10 aircraft in spring 2027, following anticipated certification by the European Union Aviation Safety Agency before the end of the year. These aircraft feature 20% more seats while burning 20% less fuel than the current fleet.
Reflecting on broader industry pressures, O’Leary noted that short-haul capacity will remain constrained into the early 2030s due to manufacturing delays at original equipment manufacturers and ongoing consolidation among European carriers.