Quick Summary
- Ryanair shares tumbled over 3% following the carrier’s decision not to provide FY27 profit projections
- The airline achieved a milestone underlying after-tax profit of €2.26 billion in FY26, representing a 40% annual increase
- Jet fuel spot prices have rocketed past $150 per barrel amid escalating Middle East tensions
- First-quarter ticket prices projected to decline by mid-single digits; second-quarter fares anticipated to remain stable
- Michael O’Leary’s CEO contract renewal nearing completion, potentially including 10 million share-based awards
Shares of Ryanair experienced a decline exceeding 3% on Monday following the European budget carrier’s announcement of stellar profit results, tempered by its refusal to provide earnings projections for the upcoming fiscal year due to unpredictable fuel pricing and geopolitical instability in the Middle East.
The Irish airline headquartered in Dublin delivered underlying after-tax earnings of €2.26 billion for the fiscal period concluding March 31, 2026 — representing a substantial 40% increase from the previous year’s €1.61 billion. Pre-tax earnings climbed 36% to reach €2.42 billion.
However, the impressive financial performance failed to satisfy investors. Market sentiment turned pessimistic due to management’s reluctance to offer forward-looking guidance and cautionary remarks about anticipated mid-single-digit fare reductions in the first quarter.
Full-year revenue expanded 11% to €15.54 billion. The carrier transported 208.4 million passengers, marking a 4% increase, while average ticket prices climbed 10% to approximately €51 per traveler.
Fourth-quarter revenue of €2.51 billion surpassed Morgan Stanley’s projection of €2.45 billion and the analyst consensus of €2.42 billion. The Q4 net deficit contracted to €311 million, likewise exceeding market forecasts.
Chief Executive Michael O’Leary explained the company’s inability to commit to specific FY27 targets. “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.
Rising Fuel Expenses Take Center Stage
Jet fuel spot market prices have escalated beyond $150 per barrel, propelled by the Iranian conflict and the disruption of shipping through 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 price levels persist. This vulnerability could drive overall expenses higher by a mid-single-digit percentage throughout FY27.
O’Leary highlighted that European carriers, including Ryanair, have pivoted to procuring jet fuel from the Americas, Norwegian sources, and West African suppliers to minimize reliance on Persian Gulf supply chains. Sorahan mentioned that fuel providers remain “very comfortable” based on discussions at a recent IATA aviation fuel conference held in Paris.
Second-quarter fare pricing currently appears “broadly flat,” representing a downward revision from earlier expectations of low single-digit growth. O’Leary linked the weaker pricing environment to consumer hesitation surrounding oil price fluctuations and inflationary concerns.
FY27 Projections and O’Leary’s Contract Renewal
Ryanair has established a target of carrying 216 million passengers during FY27, reflecting a 4% growth from FY26 levels. Certification of the Boeing MAX-10 is anticipated in late summer 2026, with initial deliveries of 15 aircraft scheduled for spring 2027.
Gross cash reserves as of March 31 totaled €3.60 billion. Net cash position reached €2.10 billion. The carrier announced plans to retire its remaining €1.20 billion bond obligation this month, effectively achieving debt-free status.
During the fiscal year, the airline repurchased approximately 21 million of its own shares for €536 million and proposed a final dividend of €0.195 per share, subject to shareholder ratification.
Ryanair’s board of directors is approaching completion of a four-year contract extension for O’Leary commencing at the conclusion of March 2028. The arrangement may encompass up to 10 million share-based incentives linked to “very ambitious” profitability or stock price milestones. Consultations with principal institutional investors are scheduled to commence within days.
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