Dublin:Irish airline Ryanair has reported a six percent drop in net profit for its second quarter, attributing the decline to the ongoing Middle East conflict, which has led to increased fuel costs and affected ticket pricing.
According to Bangladesh Sangbad Sangstha, Ryanair's profit after tax fell to 1.61 billion euros ($1.8 billion) in the three months ending September, compared to 1.72 billion euros during the same period last year. The airline, Europe's largest by passenger numbers, noted that the costs of fuel not covered by advance purchase agreements have risen due to the US-Iran war.
Ryanair's CEO Michael O'Leary stated that unless the Middle East conflict is swiftly resolved, jet-fuel prices are expected to remain high well into 2027. He also mentioned that Ryanair anticipates a 2 billion euro increase in its fuel bill for the next financial year, potentially prompting cost-saving measures such as temporary pay freezes, reduced cabin crew ratios, and increased use of AI in back-office operations.
While passenger traffic grew by five percent in the second quarter, fares saw a two percent decline as the conflict caused consumer hesitancy and delayed bookings. The airline's revenue rose by four percent to 5.7 billion euros. However, O'Leary indicated that it is too early to provide full-year profit guidance due to the sensitivity of various factors, including the conflicts in the Middle East and Ukraine, fuel prices, macroeconomic shocks, and European air traffic control strikes.
In response to the higher fuel costs, Ryanair announced last month that it would reduce its winter schedule.