Ryanair Stock Slides as Fuel Costs Cloud a Bumper Year

TLDR

• Ryanair stock fell over 3% after the airline refused to issue full-year FY27 profit guidance
• Record underlying after-tax profit of €2.26 billion for FY26, up 40% year-on-year
• Spot jet fuel prices have surged above $150 per barrel due to Middle East conflict
• Q1 fares expected to fall by a mid-single-digit percentage; Q2 pricing “broadly flat”
• CEO Michael O’Leary contract extension being finalised, potentially worth 10 million share awards

Ryanair stock dropped more than 3% on Monday after the budget airline posted record profits but refused to give any earnings guidance for the year ahead, pointing to fuel price volatility and the ongoing conflict in the Middle East.

Ryanair Holdings plc, RYAAY

The Dublin-based carrier reported underlying after-tax profit of €2.26 billion for the year ended March 31, 2026 — a 40% jump from €1.61 billion the prior year. Pre-tax profits rose 36% to €2.42 billion.

Despite the strong numbers, the market reaction was negative. Investors were spooked by the lack of forward guidance and a warning that first-quarter fares would fall by a mid-single-digit percentage.

Total revenue for the full year rose 11% to €15.54 billion. Passenger numbers grew 4% to 208.4 million, with fares up 10% to roughly €51 per passenger.

Q4 sales of €2.51 billion beat Morgan Stanley’s estimate of €2.45 billion and consensus of €2.42 billion. The Q4 net loss narrowed to €311 million, also better than analyst expectations.

Fuel Costs in Focus

Spot jet fuel prices have climbed above $150 per barrel, driven by the Iran conflict and the blockade of the Strait of Hormuz. Ryanair has hedged 80% of its FY27 fuel needs at around $67 per barrel through April 2027.

CFO Neil Sorahan warned the unhedged 20% “would obviously have a very adverse impact on our costs” if prices stay where they are. That exposure could push costs up by a mid-single-digit percentage in FY27.

O’Leary noted that European airlines, including Ryanair, are now sourcing jet fuel from the Americas, Norway and West Africa to reduce dependence on Gulf supply routes. Sorahan added that fuel suppliers remain “very comfortable” following an IATA aviation fuel conference in Paris last week.

Second-quarter pricing is currently tracking “broadly flat,” down from a prior expectation of a low single-digit increase. O’Leary attributed the softer pricing to consumer uncertainty around oil prices and inflation fears.

FY27 Outlook and O’Leary Contract

Ryanair is targeting 216 million passengers in FY27, up 4% from FY26. Boeing MAX-10 certification is expected in late summer 2026, with the first 15 deliveries targeted for spring 2027.

Gross cash at March 31 stood at €3.60 billion. Net cash was €2.10 billion. The airline said it will repay its final €1.20 billion bond this month, making it effectively debt free.

The airline bought back roughly 21 million of its own shares for €536 million during the year and declared a final dividend of €0.195 per share, pending shareholder approval.

Ryanair’s board is close to finalising a four-year contract extension with O’Leary from the end of March 2028. The deal could include up to 10 million share awards tied to “very ambitious” profit or share price targets. Engagement with major institutional shareholders is set to begin in the coming days.

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