Ryanair warns of rising costs, but travel demand remains strong
Ryanair has reported record profit for the financial year ended in March 2026, but at the same time warned that rising fuel prices, environmental charges and wages could put pressure on costs in the new financial year. According to Ryanair Holdings’ announcement of 18 May 2026, profit after tax before exceptional items rose by 40 percent, to 2.26 billion euros, while passenger traffic increased by 4 percent, to 208.4 million. Revenue rose by 11 percent, to 15.54 billion euros, and operating costs before exceptional items by 6 percent, to 13.09 billion euros. The company pointed out that the load factor remained at 94 percent, showing that high seat utilisation was maintained despite a more expensive business environment and delays in aircraft deliveries.
The results were published at a time when the European airline sector is entering the most important part of the year amid increased uncertainty over fuel prices and passenger behaviour. Ryanair says demand remains “robust”, but warns that summer bookings are being made later than usual, reducing revenue visibility for July, August and September. According to reports by The Guardian and other financial media, management expects ticket prices in the quarter from April to June could fall by a mid-single-digit percentage compared with the previous year, while the peak of the summer season could be roughly in line with last summer. This means that strong demand does not yet remove pressure on margins, especially if fuel remains at elevated levels.
Record profit with a more cautious view of the new year
In the 2025/2026 financial year, Ryanair increased traffic and revenue, and the company links the result to the recovery of ticket prices after a fall in the previous year. According to the official statement, scheduled passenger revenue rose by 14 percent, to 10.56 billion euros, as the number of passengers increased by 4 percent and average fares by 10 percent. According to Ryanair, this offset the 7 percent fall in fares recorded a year earlier. Ancillary revenue, which includes services such as baggage, seat selection and other add-ons, rose by 6 percent, to 4.99 billion euros, or around 24 euros per passenger.
Despite the strong annual result, management’s message was not purely optimistic. Ryanair said it was too early to provide a reliable profit forecast for the 2026/2027 financial year, because fuel costs, environmental obligations and wages may change significantly during the year. According to a Wall Street Journal report, the company’s shares fell after warnings about weaker price visibility and a later booking pattern. This does not mean demand is disappearing, but that the moment when passengers decide to buy tickets has changed. For an airline with large seasonal fluctuations, that visibility is important because prices, flight schedules and expected revenue are planned months in advance.
In its results, Ryanair also mentioned an exceptional item linked to a fine imposed by the Italian regulator AGCM. The company claims the fine is unfounded and expects success in the appeal process, but in its FY26 results it included a provision of 85 million euros, representing approximately one third of the 256 million euro fine. Since the 2.26 billion euro result refers to profit before the exceptional item, the overall picture of the business also depends on the outcome of that legal process. For investors, the distinction is therefore important between operating profitability, which remained strong, and legal or regulatory risks that can have a one-off impact on the profit and loss account.
Fuel is the biggest source of uncertainty
The most important warning from Ryanair starts with the price of jet fuel. The company says that 80 percent of its fuel requirements for the 2026/2027 financial year are hedged by price protection contracts roughly until April 2027, at a price of around 67 dollars per barrel. According to Ryanair’s statement, this hedging should soften the impact of volatile markets on the company’s results and further widen its cost advantage over competitors that are less well protected. Still, the remaining 20 percent of exposure can still affect unit costs if prices remain at high levels.
In the official announcement, Ryanair says the conflict in the Middle East has created economic uncertainty and that Europe’s jet fuel supply is currently relatively stable thanks to sources from West Africa, the Americas and Norway. The Guardian reports statements by chief executive Michael O’Leary according to which concern about the actual availability of fuel in Europe has almost disappeared, but the price has remained the key problem. Chief financial officer Neil Sorahan, according to the same report, said the company is increasingly confident there will be no supply shocks during the summer. However, this does not remove the risk that more expensive fuel will hit the whole sector, especially carriers that do not have a comparable level of hedging.
IATA’s jet fuel price monitor states that the indicators are based on Platts data and track average refinery prices of aviation fuel. These data are important because fuel remains one of the largest cost items in aviation, and sudden price changes can quickly alter the profitability of flights. Ryanair, because of its size and pre-agreed prices, has greater protection than smaller or financially weaker competitors. Management therefore emphasises that a prolonged period of expensive fuel could further separate companies with strong balance sheets from those relying on more expensive financing, leasing or short-term market energy prices.
Demand exists, but passengers are waiting longer
Ryanair still sees strong demand for travel, but the booking structure shows greater caution. According to The Guardian, management said passengers are leaving less time between booking and departure than in earlier seasons. Such behaviour can keep prices lower in the short term because companies have less certainty that they will sell a sufficient share of capacity in advance at higher prices. At the same time, passengers who wait until just before departure may face higher prices if capacity fills quickly.
Ryanair’s traffic data for April 2026 show continued growth. According to the company’s corporate data, 19.3 million passengers were carried in April, with a load factor of 93 percent. In the same month last year, the company carried 18.3 million passengers, also with a 93 percent load factor. This figure supports the assessment that travel continues, although prices and the pace of bookings are changing under the influence of broader economic and geopolitical uncertainty.
For Ryanair, it is especially important that its business logic rests on a large passenger volume, high load factors and low unit costs. If demand remains high, the company can maintain operational efficiency and distribute fixed costs better. If, however, fares cannot be raised at the same pace as costs, part of the pressure shifts to margins. That is precisely why the statement that demand is “robust” is only one part of the message; the other part is the warning that strong load factors alone are not enough if fuel, taxes and wages rise faster than revenue per passenger.
Environmental charges and air traffic control increase pressure
Alongside fuel, Ryanair also warns of rising environmental costs in the European Union. According to The Guardian, the company expects its environmental charges in the EU to increase this year by around 300 million euros, to approximately 1.4 billion euros. Ryanair’s management claims that such costs make European air traffic less competitive, especially compared with regions where the regulatory burden is lower. Critics of that position would point out that aviation must bear a greater part of the cost of decarbonisation, but for the financial results of companies such as Ryanair, those expenses remain concrete pressure on the cost base.
In its announcements, the company also regularly warns about problems with European air traffic control. Ryanair claims that a lack of capacity, strikes and inefficient airspace management create delays and additional costs. In its FY26 results and earlier reports, the company lists further disruptions in the European air traffic control system as risks, alongside geopolitical conflicts and macroeconomic shocks. Such warnings are not only communication pressure on regulators; delays can increase fuel consumption, disrupt crew schedules and reduce network reliability on days when the load is highest.
In the financial year, Ryanair also completed an important part of its fleet renewal. According to the official results, at the end of March, the fleet of 647 aircraft included all 210 ordered Boeing 737 “Gamechanger” aircraft. The company also stated that delays in the delivery of 29 B-8200 aircraft limited traffic growth. A more efficient fleet is important for fuel costs and emissions per passenger, but delivery delays can postpone planned growth and limit the ability to open or strengthen routes in markets where demand exists.
The balance sheet remains strong, and growth continues more cautiously
In its results, Ryanair emphasises a strong balance sheet. According to the official statement, the company had 3.6 billion euros in gross cash at the end of March, after 1.9 billion euros in capital expenditure, 1.2 billion euros in debt repayments and more than 900 million euros in shareholder distributions. Net cash amounted to 2.1 billion euros, and the company said this enables it to repay its final 1.2 billion euro bond, after which the group would effectively be debt-free. Such a position gives Ryanair greater resilience in a period of expensive fuel and higher interest rates.
Management announced a final dividend of 0.195 euros per share, subject to approval by the annual general meeting, and the continuation of the share buyback programme. According to the results, during FY26 the company bought and cancelled around 2 percent of issued share capital, or more than 20 million shares. These moves show that surplus cash continues to be returned to shareholders, but at the same time management emphasises the need to finance future MAX-10 aircraft deliveries and maintain a sufficiently high level of cash. In an environment of uncertain costs, such a combination of growth, investment and capital returns requires more cautious planning.
According to a Wall Street Journal report, Ryanair expects that the number of passengers in the 2026/2027 financial year could rise to around 216 million. That would mean continued growth, but not a return to unlimited expansion. The company must align capacity with aircraft deliveries, crew availability, fuel prices, regulatory costs and demand in individual markets. Since some passengers are deciding later, management is for now avoiding a precise profit forecast and leaving room for adjustment if fares, fuel or macroeconomic conditions change during the summer.
What the results mean for passengers and the market
For passengers, the message is not straightforward. On the one hand, Ryanair says demand is strong and that it sees no serious risk of a fuel shortage in Europe during the summer. On the other hand, the company warns that late bookings and volatile costs may lead to price changes, especially closer to the departure date. If consumers delay purchases because of uncertainty, prices may remain lower in the short term, but filling capacity in the final weeks can increase prices for those who wait the longest. This pattern explains why Ryanair is simultaneously talking about strong demand and more cautious expectations for summer fares.
For the European airline market, Ryanair’s results confirm that the low-cost model can still generate strong profit, but also that competitive advantage is increasingly based on financial resilience. Companies with more cash, lower debt, hedged fuel prices and a more efficient fleet can withstand shocks more easily. Weaker carriers, especially those with higher leasing costs and less protection against fuel prices, could be more vulnerable if high energy prices persist. Ryanair is therefore not warning only about its own costs, but also about a possible shift in the balance of power in European aviation.
The final assessment for the new financial year will depend on several interconnected factors: fuel prices, supply stability, booking pace, regulatory costs, aircraft deliveries and the state of European air traffic control. According to the available information, Ryanair enters summer 2026 with a record annual result and high load factors, but without a firm profit forecast for the year ahead. That is also the company’s main message: there are passengers, the network remains large, but cost pressures and uncertainty over fares mean that strong demand is no longer enough for a fully predictable result.
Sources:
- Ryanair Holdings plc – official FY26 results, data on profit, revenue, costs, passenger traffic, fuel hedging and fleet (link)
- Ryanair Investor Relations – announcement of the latest results and April passenger traffic (link)
- Ryanair Corporate Key Stats – monthly passenger traffic, load factor, punctuality and emissions for 2026 and previous years (link)
- The Guardian – report on Ryanair’s warnings about fuel prices, later bookings and summer fares (link)
- IATA Jet Fuel Price Monitor – explanation of jet fuel price monitoring according to Platts data (link)
- The Wall Street Journal – report on the market reaction, later bookings, expected passenger growth and uncertainty over the profit forecast (link)