Irish low-cost airline Ryanair reported a 34% year-on-year decline in net profit for its first financial quarter, falling to €538 million. The result missed analysts’ expectations, while higher fuel prices and weaker demand weighed on the company’s performance.
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Rising Costs Outpaced Revenue Growth
Ryanair’s revenue for the period from April to June increased by 1% year on year to €4.38 billion. Operating costs, however, rose by 11% to €3.81 billion, significantly reducing the company’s overall profitability.
Net profit of €538 million came in below analysts’ estimates of approximately €624 million, according to a Bloomberg survey. The results showed that modest revenue growth was not enough to offset the faster increase in expenses.
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Conflict Delayed Bookings and Raised Fuel Supply Concerns
According to CEO Michael O’Leary, the conflict in the Middle East unsettled consumers, increased economic uncertainty and raised concerns about a possible shortage of aviation fuel in the European Union. As a result, some customers postponed their bookings.
Tensions in the region also disrupted shipping through the Strait of Hormuz, which normally handles around one-fifth of global oil supplies. Ryanair is the first major European airline to publish results for the second calendar quarter, giving investors an early indication of how the conflict is affecting Europe’s aviation industry.
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Source: ČTK
