Sparks

Ryanair’s Q127 results are weaker than expected, with profit after tax (PAT)  falling 34% to €538m, while the operating margin fell by around 8pp to 13.1%. Revenue still rose 1% to €4.38bn as 6% traffic growth to 61.3 million passengers was offset by a 6% decline in average fares to €48, while total operating costs rose 11% to €3.81bn as the price of the group’s 20% unhedged jet-fuel more than doubled during the quarter. This marks a much sharper deceleration than management’s full-year guidance implies, with the 6% H1 traffic growth rate expected to slow to just 2% in H2 as FY27 capacity growth is held at 4% overall, to 216 million passengers.

Management attributed the weak quarter primarily to the Middle East conflict, with consumer hesitancy, jet-fuel supply concerns and later bookings requiring fare stimulation through the period. The network mix continues to shift toward lower-cost, lower-tax markets, with three new bases opened this summer (Rabat, Tirana, Trapani) as capacity is withdrawn from higher-cost markets such as Austria, Germany and regional Spain. On the outlook, management is not providing FY27 PAT guidance, citing zero visibility into H2 this early in the year and a H1 outcome dependent on close-in August and September bookings, while Q2 pricing is already trending modestly down year-on-year.