Ryanair first-half profit falls 15% to €2.15 billion as unhedged fuel costs double
Ryanair carried more people at lower fares, but higher fuel and operating costs cut profit. It announced a new €800 million buyback and a cost review.
Ryanair has reported a 15% fall in first-half profit after tax to €2.15 billion, down from €2.54 billion a year earlier, as the price of the fuel it had not hedged roughly doubled. Traffic grew 6% to 125.8 million passengers, but average fares fell 4%.
Chief executive Michael O'Leary told CNBC that he expects fares to rise next year as higher fuel costs feed through the industry.
The numbers
For the six months to 30 September, Ryanair's revenue rose 3% to €10.08 billion. Average fares fell 4% to €55.70. Operating costs climbed 10% to €7.69 billion, driven mainly by fuel. The airline said the unhedged part of its fuel bill was bought at prices of around $130 a barrel, roughly double the level of its hedges.
Ryanair said it is about 80% hedged for the 2027 financial year at around $67 a barrel, and about 25% hedged for the 2028 financial year at around $95 a barrel. It warned that its fuel bill for the 2028 financial year could be about €2 billion higher.
The board declared an interim dividend of €0.273 per share and announced a new €800 million share buyback, starting in February. Gross cash stood at €2.6 billion.
Traffic and growth plans
Ryanair kept its target of 214 million passengers for the full 2027 financial year. For summer 2027 it expects more than 220 million passengers on an annualised basis, helped by the delivery of its first 16 Boeing 737 MAX-10 aircraft. It has announced 126 new routes and a new base in Rimini.
A cost review
To offset higher fuel costs, Ryanair said it has started a cost review. According to the company, it covers negotiations with airports, possible temporary pay freezes, lower crewing ratios and the use of artificial intelligence. It did not give a savings target.
Fares likely to rise in 2027
According to CNBC, O'Leary said fares could rise by around 10%, and possibly up to 20%, in 2027 as airlines pass on higher fuel costs. CNBC reported that Ryanair shares were down more than 22% this year before the results.
CNBC linked the jump in fuel costs to the war involving Iran and its effect on oil markets. Airlines that have hedged less of their fuel are more exposed to that rise, which is why investors will watch how competitors plan capacity for next summer.
Why it matters
Ryanair is one of Europe's biggest airlines and its pricing affects tourism, business travel and regional airports across the continent. Its numbers show the two sides of the current market: demand is still strong, but costs, above all fuel, are moving faster than fares.
The results also come at a time when Europe's broader economy is growing slowly. Euro-area GDP grew 0.4% in the third quarter, and the European Central Bank has kept rates on hold. Higher airfares in 2027 would add to price pressure in services.
What it means for European founders and investors
Travel budgets. If O'Leary's forecast holds, startups and scale-ups with distributed teams should expect higher travel costs next year. Booking earlier and reviewing travel policies may help.
Travel and tourism startups. Higher fares can reduce demand for short city breaks and secondary destinations. Companies in booking, accommodation and experiences should model lower conversion at higher prices, while price-comparison and loyalty businesses may benefit.
Efficiency technology. Ryanair's plan to use AI and renegotiate costs is part of a wider push in aviation to cut costs that are not fuel. Startups selling software for crew planning, maintenance, fuel efficiency and airport operations are likely to find receptive buyers.
Hedging lessons. The gap between Ryanair's hedged and unhedged fuel shows how much risk management matters when input prices are volatile. That applies to any company with large exposure to energy or commodity costs.
What to watch
Ryanair usually publishes its full-year results in May. Before then, investors will watch oil prices, the progress of the cost review, MAX-10 deliveries and whether competitors cut capacity for summer 2027.
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