Ryanair profits plunge 34% as Middle East conflict drives up fuel costs
Europe's biggest airline says soaring jet-fuel prices and weaker ticket demand hit first-quarter earnings
Irish no-frills airline Ryanair on Monday said net profit slumped 34 percent in its first quarter as the Middle East conflict sent jet-fuel prices soaring and impacted ticket sales.
Profit after tax dropped to 538 million euros ($616 million) in the three months to the end of June, from 820 million euros one year earlier, the carrier said in a statement.
Ryanair, which is Europe's biggest airline by passenger numbers and flies mainly across the continent, said the cost of its fuel not insured by price spikes had soared owing to the US-Iran war.
"Operating costs rose 11 percent to 3.81 billion euros as the price of our 20-percent unhedged jet-fuel more than doubled" in the first quarter, chief executive Michael O'Leary said in the earnings statement.
While passenger traffic grew six percent, fares dropped six percent.
Fares "required stimulation as the Middle East conflict led to consumer hesitancy, concerns about EU jet-fuel shortages, economic uncertainty and later bookings", O'Leary said.
He added that Ryanair's net profit for the remainder of its financial year "remains highly sensitive to... conflict escalation in the Middle East and Ukraine, the price of unhedged jet-fuel, macro-economic shocks" and European air traffic control strikes.