Ryanair has said it remains confident it can avoid major jet fuel shortages this summer despite growing concerns over disruption linked to the Iran conflict and restrictions in the Strait of Hormuz, but the airline warned that passengers booking later in the year could face higher air fares.
The budget carrier, which is Europe’s largest airline by passenger numbers, said it does not currently expect widespread fuel supply problems to impact its summer operations. However, company executives acknowledged that ongoing geopolitical tensions and rising operating costs could eventually force airlines to increase ticket prices.
The comments come as airlines and holiday companies across Europe continue monitoring the impact of instability in the Middle East, particularly around the Strait of Hormuz, one of the world’s most important energy shipping routes.
Ryanair Says Summer Fuel Supply Remains Stable
Speaking after the airline released its latest financial results, Ryanair chief financial officer Neil Sorahan said the company was “increasingly confident” that it would avoid fuel supply shocks during the peak summer travel season.
The airline noted that Europe currently remains well supplied with jet fuel, partly because of increased shipments arriving from west Africa, Norway and the Americas.
Despite fears that restrictions around the Strait of Hormuz could disrupt global energy markets, Ryanair said contingency planning and diversified fuel sourcing had helped reduce immediate risks for European airlines.
The Strait of Hormuz remains a vital maritime route for global oil and fuel transportation, with roughly a fifth of the world’s oil supply normally passing through the narrow waterway. Ongoing tensions involving Iran, the United States and regional military activity have raised concerns among airlines, shipping companies and financial markets over potential supply disruptions.
Industry analysts have warned that any escalation affecting oil transport routes could quickly increase aviation fuel prices worldwide.
Holidaymakers Booking Later Could Pay More
Although Ryanair said demand for travel remains relatively strong, the airline revealed that many customers are delaying bookings because of economic uncertainty and concerns about global instability.
According to Sorahan, travellers are increasingly waiting until closer to departure dates before finalising holiday plans.
“Demand is still strong, but people are leaving it longer to book so we do not have the visibility that we normally have for July to September,” he said.
He added that late bookings could eventually lead to higher fares if demand remains strong while airlines attempt to offset rising operational expenses.
The company said ticket prices recently declined because uncertainty surrounding the Middle East conflict affected consumer confidence and travel planning.
Ryanair now expects fares during the three months ending in June to fall by a mid-single-digit percentage compared with last year.
The airline also revised its expectations for summer pricing, saying fares are now expected to remain broadly flat compared with last summer rather than increase modestly as previously forecast.
Iran Conflict Adds Pressure to Airline Industry
The aviation sector has faced mounting pressure since tensions involving Iran intensified and concerns grew over energy market volatility.
Airlines remain heavily dependent on stable jet fuel supplies, and even relatively small increases in oil prices can significantly impact profitability across the industry.
Fuel is typically one of the largest operating costs for airlines, alongside staffing and airport charges.
Although Ryanair has protected itself from some price increases through fuel hedging agreements, the company acknowledged that costs could still rise if global energy prices remain elevated.
The airline said it has already hedged 80% of its fuel requirements through April 2027 at approximately $67 per barrel, helping shield the company from immediate price spikes.
However, executives warned that prolonged instability or additional geopolitical disruptions could still affect future operating costs and airline pricing strategies.
Consumers Continue Facing Cost-of-Living Pressure
Travel industry experts said airlines currently face a difficult balancing act between rising operating costs and weaker consumer spending.
Dan Coatsworth, head of markets at AJ Bell, said airlines may struggle to pass higher costs directly onto consumers because many households are still dealing with inflation and financial pressures.
“The market is too fragile to raise fares aggressively,” he said.
“Airlines and holiday companies are having to drop prices, or at best keep them level, just to keep demand ticking over.”
However, he warned that if fuel costs and inflationary pressures continue rising, airlines may have little choice but to increase prices later this year.
European consumers have faced several years of elevated living costs following inflation spikes linked to the Covid-19 recovery period, supply chain disruption and global energy market instability.
Many travellers are also increasingly choosing shorter or domestic trips to reduce holiday spending.
Ryanair Reports Strong Annual Profit
Despite current market uncertainty, Ryanair reported a record annual profit after tax of €2.26 billion for the financial year ending in March.
The company said strong passenger demand and continued network expansion helped support earnings despite economic volatility.
However, Ryanair suspended guidance for its 2027 financial year, saying it was too early to provide accurate forecasts because of uncertainty surrounding fuel prices, wage costs and environmental taxes.
The airline also warned that environmental levies imposed across the European Union are expected to rise sharply.
According to the company, EU environmental taxes could increase by around €300 million this year, bringing the total to approximately €1.4 billion.
Ryanair argued that higher taxes risk damaging the competitiveness of European air travel and increasing costs for passengers.
Michael O’Leary Contract Extension Under Discussion
The airline also confirmed it is in discussions with long-serving chief executive Michael O’Leary over extending his contract beyond 2028.
Under proposed terms, O’Leary could remain in charge until 2032.
The company said the proposed agreement would allow the Ryanair chief executive to purchase 10 million shares at pre-Iran conflict market prices if ambitious profit and share-price growth targets are achieved.
O’Leary has led Ryanair since 1994 and is widely credited with transforming the carrier into Europe’s largest low-cost airline.
Shares in Ryanair fell about 4% in early trading following the company’s announcement and have lost more than a quarter of their value since the start of the year amid broader airline industry concerns.