Key Highlights
- Shares of Ryanair declined more than 3% following the carrier’s decision not to provide FY27 profit forecasts
- Annual underlying profit after tax reached a record €2.26 billion in FY26, marking a 40% increase from the previous year
- Jet fuel spot prices have climbed beyond $150 per barrel amid escalating Middle East tensions
- First-quarter ticket prices anticipated to decline by a mid-single-digit percentage; second-quarter fares forecast as “broadly flat”
- Chief Executive Michael O’Leary’s contract renewal nearing completion, potentially including 10 million shares in performance-based compensation
Shares of Ryanair tumbled over 3% during Monday trading after Europe’s largest budget airline delivered record-breaking annual results but declined to provide forward-looking profit projections, citing jet fuel price instability and continuing geopolitical tensions in the Middle East.
The Irish carrier announced underlying profit after tax of €2.26 billion for the fiscal year ending March 31, 2026 — representing a substantial 40% increase compared to €1.61 billion in the prior fiscal period. Profit before tax climbed 36% to reach €2.42 billion.
The impressive financial performance, however, failed to impress market participants. Traders reacted negatively to the absence of future earnings projections and management’s cautionary statement that first-quarter ticket prices would experience a mid-single-digit decline.
Full-year revenues advanced 11% to €15.54 billion. The airline transported 4% more passengers, reaching 208.4 million travelers, while average fares increased 10% to approximately €51 per passenger.
Fourth-quarter revenues of €2.51 billion exceeded Morgan Stanley’s projection of €2.45 billion and surpassed the analyst consensus estimate of €2.42 billion. The carrier’s Q4 net loss contracted to €311 million, outperforming Wall Street expectations.
Chief Executive Michael O’Leary explained the company’s inability to commit to specific FY27 projections. “With zero H2 visibility and significant fuel price/potential supply volatility it is far too early to provide any meaningful FY27 profit guidance at this time,” he stated.
Jet Fuel Price Pressures Mount
Jet fuel spot market prices have surged past $150 per barrel, propelled by the Iranian conflict and disruptions at the Strait of Hormuz. Ryanair has secured hedging contracts covering 80% of its FY27 fuel requirements at approximately $67 per barrel extending through April 2027.
Chief Financial Officer Neil Sorahan cautioned that the remaining unhedged 20% “would obviously have a very adverse impact on our costs” should current pricing levels persist. This exposure threatens to elevate operational costs by a mid-single-digit percentage throughout FY27.
O’Leary revealed that European carriers, including Ryanair, have pivoted to procuring jet fuel from the Americas, Norway and West Africa to minimize reliance on Middle Eastern supply channels. Sorahan mentioned that fuel suppliers expressed confidence during a recent IATA aviation fuel summit held in Paris.
Second-quarter fare trends are currently showing “broadly flat” performance, representing a downward revision from earlier projections of low single-digit growth. O’Leary linked the weakened pricing environment to consumer anxiety surrounding oil market volatility and inflation concerns.
Future Passenger Targets and Leadership Extension
The carrier is projecting 216 million passengers for FY27, representing a 4% gain over FY26 figures. Boeing’s MAX-10 aircraft certification is anticipated in late summer 2026, with initial deliveries of 15 aircraft scheduled for spring 2027.
Gross cash holdings as of March 31 totaled €3.60 billion. Net cash position stood at €2.10 billion. Management indicated the airline will retire its remaining €1.20 billion bond obligation this month, effectively achieving debt-free status.
During the fiscal year, the company repurchased approximately 21 million shares for €536 million and announced a final dividend of €0.195 per share, subject to shareholder ratification.
The airline’s board is in final negotiations on a four-year contract extension for O’Leary beginning at the conclusion of March 2028. The compensation package may feature up to 10 million share awards contingent upon “very ambitious” profit or stock price milestones. Discussions with major institutional investors are scheduled to commence shortly.
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