Budget carrier Ryanair has announced that despite the surge in jet fuel prices, it does not anticipate raising average fares during the upcoming summer season. The airline noted a trend of consumers delaying their bookings due to uncertainty, implying that travelers may still find affordable deals rather than airlines passing on increased costs resulting from the ongoing Middle East conflict.
Ryanair revealed a recent weakening in airfares, with projections indicating lower average prices in the months leading up to the end of June. The company adjusted its forecast for summer fares, now expecting pricing to remain relatively stable between July and September, compared to an earlier anticipation of a slight increase during the peak season.
CEO Michael O’Leary commented on the pricing adjustments, attributing them to economic uncertainties stemming from higher oil prices, concerns about fuel shortages, and potential impacts of inflation on consumer spending. Despite having secured pricing for 80% of its jet fuel requirements, Ryanair faced escalated costs for the remaining 20% due to the Middle East conflict.
However, the airline expressed optimism regarding the diminishing threat of fuel shortages, as suppliers adapted to the extended closure of the Strait of Hormuz. Ryanair’s finance chief, Neil Sorahan, stated that the company now holds a more positive view on the steady supply of jet fuel even beyond the summer period, as refiners expand production and explore alternative sources to compensate for disrupted Gulf supplies.
Mr. O’Leary highlighted that European airlines have been diversifying their jet fuel sources to mitigate the supply disruption caused by Iran’s actions in the Strait of Hormuz. He emphasized that despite ongoing economic uncertainties, Europe maintains a relatively stable jet fuel supply chain, with significant volumes sourced from regions like West Africa, the Americas, and Norway.
Ryanair reported a 40% increase in profits, reaching £1.96 billion for the fiscal year ending on March 31, slightly surpassing expectations. The company refrained from providing a clear outlook for the new financial year due to uncertainties surrounding demand and fuel costs.
Similar to other airlines, Ryanair observed a growing trend of last-minute bookings, although it noted that demand remained strong. The carrier anticipates a 4% rise in passenger numbers for the year ending March 2027, reaching 216 million, aligning with the 4% growth seen in the previous fiscal year 2025/26.
Negotiations are nearing completion for an extension to Mr. O’Leary’s contract until 2032, which includes a share option agreement of 10 million shares, subject to specific share-price and profit targets. An earlier share option scheme stands to potentially earn O’Leary up to £87 million.
