Iran War Chokes Ryanair's Profits: Fuel Soars, Fares Drop by a Third

Ryanair, Europe's biggest airline, just saw its profits crash by a shocking 34% in the first quarter of its fiscal year, hitting 538 million EUR. This sharp decline comes as the five-month-old Iran war continues to rattle global markets, doubling the cost of the airline's unhedged jet fuel while simultaneously forcing it to slash fares to tempt wary travelers. The ongoing conflict has had a brutal dual impact: it sent Brent crude oil prices spiking above $90 a barrel again recently after an earlier dip, driving up Ryanair operating costs by 11%. Meanwhile, widespread consumer hesitancy about travel, fueled by the Middle East's instability and concerns over potential jet fuel shortages, led to a 6% drop in average fares despite a 6% rise in passenger numbers. Adding to the complexity, an interim peace deal between the US and Iran in June had briefly offered a glimmer of hope, reopening the critical Strait of Hormuz, only for negotiations to collapse and hostilities to reignite, keeping oil markets on edge. Looking ahead, Ryanair CEO Michael O'Leary is warning of continued uncertainty, with Q2 pricing expected to trend modestly down and bookings still being made much later than usual, hurting visibility. The airline's full-year outlook remains highly sensitive to any further escalation in the Middle East, fluctuations in unhedged jet fuel prices, and broader economic shocks. Experts are also eyeing a potential wave of airline consolidation across Europe, which could eventually lead to higher ticket prices later in 2026 and into 2027 if capacity shrinks significantly.