Ryanair, the European budget carrier, reported on November 2 that profit after tax fell 15% year on year to 2.15 billion euros in the first half of its fiscal 2027, covering the period to September 30, weighed down by higher fuel costs and lower average fares.
The company also warned that, at prevailing forward oil prices, fuel spending in fiscal 2028 is expected to rise by around 2 billion euros, and it is weighing measures such as a temporary freeze on staff pay and leaner cabin crew staffing to offset the cost pressure.
Fuel costs seen up 2 billion euros, fare rises unlikely to fully offset the hit
Ryanair expects jet fuel prices to stay elevated through 2027 unless Middle East tensions end swiftly. As previously locked-in cheaper fuel contracts expire, European airlines broadly face higher fuel bills next year. Ryanair has so far hedged about 80% of its fuel needs for the fiscal year ending March 2027 at roughly $67 a barrel. For the following fiscal year, running from April 2027 to March 2028, it has hedged only 25% of its needs at around $95 a barrel.
Chief Executive Michael O'Leary expects short-haul European fares to rise markedly next year as fuel costs climb and rivals cut capacity, but the increase will still not be enough to fully offset the projected 2 billion euro rise in fuel spending. To cope, the company is reviewing operating expenses across the board, including renegotiating airport charges, adjusting labor agreements nearing expiry, a possible temporary pay freeze, a lower cabin crew ratio, and greater use of artificial intelligence to boost efficiency in operations and back-office support.
First-half profit down 15%, full-year outlook still unclear
The results show Ryanair's first-half fiscal 2027 revenue rose 3% year on year to 10.08 billion euros, passenger numbers climbed 6% to 125.8 million, but average fares fell 4%. Operating costs rose 10% to 7.69 billion euros over the same period, with fuel and oil-related spending up 15% at 3.4 billion euros. The company said the doubling of unhedged fuel prices, about 20% of its needs, to roughly $130 a barrel was a major driver of the profit decline. In addition, Middle East tensions made consumers more cautious about travel and delayed bookings, pushing average fares lower.
In the second fiscal quarter ended September 30, profit after tax fell 6% year on year to 1.61 billion euros. Ryanair has not provided clear profit guidance for the full fiscal year ending March 2027. It said third-quarter ticket prices are currently slightly above year-earlier levels, but passengers are booking closer to departure, reducing its ability to forecast future revenue. To reduce exposure to unhedged winter fuel costs, Ryanair had already cut its passenger target for the fiscal year to 214 million from 216 million, and expects traffic from November to March to be broadly flat versus a year earlier.
Announces 800 million euro buyback and interim dividend
Despite the profit pressure, Ryanair still plans to keep returning cash to shareholders. It announced a new 800 million euro share buyback to begin in February 2027, expected to run for about 10 months, along with an interim dividend of 0.273 euros per share payable in late February 2027. As of September 30, Ryanair held total cash of 2.6 billion euros. The company completed a previous 750 million euro buyback in September this year, and since 2008 has repurchased and canceled more than 40% of its previously issued share capital.
Comments