Ryanair Holdings PLC announced a significant increase in its annual profit, with pretax profit jumping 36% to €2.42 billion for the 12 months ending March, up from €1.78 billion the previous year. The post-tax profit reached €2.26 billion, a 40% rise from €1.61 billion, surpassing analyst forecasts. Total operating revenue climbed 11% to €15.54 billion, driven by a 4% increase in passengers to 208.4 million and scheduled revenue rising 14% to €10.56 billion, with fares up 10% to approximately €51 per passenger. Ancillary revenue also increased by 6% to €4.99 billion or €24 per passenger.
Despite the strong annual performance, Ryanair warned against providing profit guidance for the new fiscal year (FY27), citing significant uncertainty. This uncertainty stems from the Middle East conflict, which has led to economic instability, higher oil prices, and potential supply volatility for jet fuel. CEO Michael O’Leary noted that consumer nervousness, particularly concerning the broader impacts of the Iran war, has necessitated some price discounting to maintain passenger volumes. The airline expects first-quarter fares for FY27 to be behind the previous year and second-quarter pricing (July to September) to trend broadly flat, a downgrade from earlier forecasts for a rise.
Ryanair's conservative jet-fuel hedging strategy has insulated the company somewhat, with 80% of its fuel requirements for the year hedged at $67 per barrel, less than half the current spot price. However, the unhedged 20% remains exposed to higher fuel costs, and EU environmental taxes are projected to add another €300 million in FY27, totaling €1.4 billion. The company anticipates a mid-single-digit percentage rise in costs per passenger if current fuel price levels persist. While the risk of jet fuel shortages in Europe has decreased, the company remains exposed to adverse external developments, including escalating conflicts, fuel supply disruptions, macroeconomic shocks, and air traffic control strikes.
