Group Chief Executive Officer & Executive Director, Ryanair
Michael O'Leary Ryanair presentatioin July 20 2026
Ryanair results April to June quarter 2027, presentation by CEO Michael O'Leary.
About Michael O'leary
Michael O'Leary, Group CEO of Ryanair, reported a Q1 FY27 profit after tax of €538 million, a 34% decline from the prior year, which he attributed to a doubling of unhedged fuel costs and a 6% drop in average fares partly due to the Middle East conflict and Easter timing. He noted that traffic grew 6% to 61.3 million passengers, and that Ryanair has hedged 80% of FY27 jet fuel at $67 per barrel and 15% of FY28 fuel at $85 per barrel. O'Leary stated that the airline will not wait for passengers delayed by passport queues, saying "the plane is going without you" if they are not at the boarding gate on time. O'Leary criticized the UK government's Air Passenger Duty as a "ludicrous" tax, arguing its abolition would boost tourism, and dismissed a Treasury response as evidence that officials "don't live in the real world." He also opposed proposed EU passenger rights changes requiring airlines to advertise fares that include a second carry-on bag, arguing that more than 50% of passengers do not bring one and that the rule would force airlines to advertise higher prices than their lowest available fares. He described the regulation as "bureaucratic bunk" and said the EU has failed to address air traffic control delays or the emissions trading system tax on intra-EU flights.
Transcript (6 segments)
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Michael O'Leary0:00
Ladies and gentlemen, good morning and welcome to the Ryanair Q1 results presentation. I'm Michael O'Leary, the Group CEO, and I'm joined as always by our Group CFO, Neil Sorahan. This morning we reported a Q1 profit after tax of 538 million. That was a 34% fall on the prior year Q1 profit after tax of 820 million. Principal cause of this was the price of our unhedged, 20% unhedged fuel doubled in the quarter, and fares fell 6%, primarily we think due to the impact of the Middle East conflict and the first part of Easter falling into prior year Q4.
The highlights of the quarter include traffic grew 6% to 61.3 million passengers. Revenue per passenger fell 5%, mainly due to average fares falling 6%. Unit costs rose 5%, again primarily because of the unhedged 20% of our jet fuel price doubled to over $150 per barrel. The good news, however, is that our FY27 jet fuel is 80% hedged at $67 a barrel, and this morning we were able to announce that we've hedged the first 15% of our FY28 fuel at $85 a barrel, taking advantage of some recent price weakness. This summer we've opened three new bases, Rabat in Morocco, Tirana in Albania, and Trapani in southern Italy, and we have 130 new routes on sale, so growth continues. And I'm pleased to report that we paid, or repaid, the final 1.2 billion bond in May, leaving the group essentially debt-free.
Scheduled revenue in Q1 dipped 1% to 2.91 billion as traffic grew 6%, but at 6% lower fares. Q1 fares, as I've already said, required stimulation as the Middle East conflict led, we think, to consumer hesitancy. Concerns about EU jet fuel shortages also impacted on bookings in Q1, economic uncertainty and later bookings. However, our conservative hedging policy, under which 80% of this year's fuel is hedged at $67 a barrel, has insulated our earnings during this period of very volatile oil prices. And this widens our cost advantage over all of our EU competitors. We recently, as I said, extended those fuel hedges. We're now 15% hedged for FY28 at $85 per barrel.
The balance sheet remains strong. At the quarter end at the 30th of June, gross cash was just over 2.8 billion euros, and this is after repaying 1.3 billion in debt repayments and half a billion in capex. Liquidity is further boosted by our 1.1 billion revolving credit facility, which is mostly undrawn as we speak. We're now 90% through our 750 million buyback program. We would expect to complete that sometime around the AGM in September. Over the coming year, following the May repayment of the 1.2 billion bond, our funding priorities will be to fund our MAX 10 capex with the first 15 of those aircraft coming in the spring of '27, funding shareholder dividends, and the completion of the current buyback program from internal cash flows, while still rebuilding gross cash back to 4 billion.
To touch briefly on fleet, Boeing continues to expect the MAX 10 certification will take place late in late summer 2026. In fact, I spoke with Boeing last week, and they expect to announce the certification of the MAX 7 aircraft shortly. They've also confirmed that they expect to deliver our first 15 MAX 10s on time in the spring of 2027. And with 300 of these super fuel-efficient aircraft, they burn 20% less fuel but carry 20% more seats, due to deliver by March 2034, we're on track to grow traffic to 300 million passengers by 2034. We expect over that period European short-haul capacity to remain constrained, certainly until 2030, as the two main aircraft manufacturers remain well behind on aircraft deliveries.
Industry capacity constraints, combined with our widening cost advantage, strong balance sheet, low-cost, fuel-efficient aircraft order book, and industry-leading ops resilience will, we believe, facilitate Ryanair's sustainable, profitable growth to over 300 million passengers by FY34. Outlook at this point in time of the year, we have very little visibility, but those FY27 traffic remains on track to grow 4% to 216 million passengers. Monthly growth is about 6% in H1. It will fall to about 2% in H2 as we cut share as we reduce our exposure to unhedged oil in the second half of the year. Our unit cost leadership continues to widen. Jet fuel is 80% hedged to March '27 at $67 per barrel, which helps us to offset a 300 million increase this year in EU environmental taxes, significant crew pay increases under new multi-year CLAs, and higher maintenance. While 2026 traffic volumes remain strong, the booking window remains closer in than last year, which further reduces visibility. Despite a recent uptick in volumes and less price stimulation necessary into Q2, Q2 pricing is trending modestly down year-on-year. And the final H1 fare outcome is heavily dependent on the strength of close-in bookings for the remainder of August and September. As is normal at this time of the year, we have zero H2 visibility, and so it remains far too early to provide any meaningful FY27 profit after tax guidance.