Ryanair eyes cost cuts as it faces a €2 billion rise in its fuel bill next year

Ryanair reported a net profit of €2.15 billion for the period between April and September 2026, the first half of its financial year ending March 2027.

The result was 15% below the same period last year.

This came as unhedged jet fuel prices doubled while fares also fell, although passenger numbers increased. The airline is reviewing costs as it prepares for a further rise in its fuel bill next year.

On a per-share basis, the Irish airline's first-half diluted earnings fell 14% to €2.05 per share. In the same period, revenue rose 3% to €10.08bn and passenger numbers grew by 6% to 125.8 million, but fares fell by 4%.

Ryanair said the Middle East conflict had made consumers more hesitant and led them to book later as operating costs increased by 10% to €7.69 billion.

The results reflect only part of the rise in fuel prices as Ryanair has hedged 80% of its fuel needs for the year ending March 2027, using financial contracts to lock in prices in advance.

This has helped protect its earnings, but the price of the remaining 20% doubled.

A €2 billion fuel bill increase

According to Ryanair, its fuel bill could rise by around €2 billion in the financial year ending March 2028, based on current forward prices.

"Unless there is a swift resolution of the Middle East conflict, we expect jet-fuel prices to remain elevated well into 2027," CEO Michael O'Leary said.

O'Leary warned that cheaper fuel hedges would expire ahead of summer 2027, leaving European airlines facing much higher bills.

He also previously warned that European airfares could rise by up to 20% in 2027 in an exclusive interview with Euronews in late October.

However, Ryanair expects higher fares and cuts in competitors' capacity to fall short of fully covering its extra fuel costs.

To address the elevated costs, Ryanair is reviewing possible cost-cutting measures, including temporary pay freezes, lower crew-to-passenger ratios and greater use of AI across operations and support teams.

The airline also announced an €800 million share buyback programme, starting in February 2027 and expected to run for around 10 months, subject to market conditions.

Demand for October–December remains strong, with fares running modestly above last year, but late bookings make the outlook harder to predict.

Ryanair said it was too early to give a full-year profit forecast, citing uncertainty over conflicts, fuel prices, the wider economy and European air traffic control disruptions.

In September, Ryanair announced it would reduce its winter schedule to limit exposure to unhedged fuel costs, cutting its full-year passenger target from 216 million to 214 million.

Ryanair's share price was up by 2% in Dublin in early trading on Monday.