Ryanair (Ryanair Holdings plc (RYAAY)) just dropped its fiscal 2026 earnings, and the numbers are solid. Profit after tax before exceptional items hit €2.26 billion, up 40% from last year, as revenue climbed 11% to €15.54 billion. The airline carried 208.4 million passengers, up 4%, even with Boeing (Boeing Co (BA)) delivering 29 B-8200 aircraft late. Fares rose 10%, and ancillary revenue per passenger held at €24.
But the real headline came from CEO Michael O'Leary on the earnings call. He warned that some of Europe's weaker carriers—what he called "our flaky competitors"—might not survive the winter if fuel prices stay elevated. It's a classic O'Leary jab, but it underscores a real tension in the industry: fuel costs are rising, and not everyone has Ryanair's balance sheet.
The Numbers
On a GAAP basis, profit attributable to shareholders rose 35% to €2.17 billion. Basic IFRS EPS jumped 41% to €2.0594, and operating profit surged 52% to €2.37 billion. Operating costs before exceptional items increased 6% to €13.09 billion, with maintenance up 16% (more flying, engine issues) and staff costs up 6%. Ryanair also booked an €85 million provision for an Italian AGCM fine it plans to appeal.
Cash flow was strong: operating cash flow of €3.69 billion, gross cash of €3.6 billion, and net cash of €2.1 billion. The airline spent €1.9 billion on capex, repaid €1.2 billion in debt, and returned over €900 million to shareholders via dividends and buybacks. Ryanair expects to repay its final €1.2 billion in bonds in May, leaving it "effectively debt free."
Fuel and the Middle East
For fiscal 2027, Ryanair expects traffic to grow 4% to about 216 million passengers. The airline has 80% of its jet fuel needs hedged at roughly $67 per barrel, below last year's levels. But the remaining 20% is exposed to spot prices, which have surged due to the ongoing Iran war. Ryanair said it doesn't expect jet fuel supply shortages, citing improving alternatives outside GCC oil producers, but it warned that elevated fuel prices, higher environmental taxes, rising maintenance costs, and macroeconomic uncertainty could weigh on margins and pricing visibility.
O'Leary's warning about "flaky" competitors is a reminder that Ryanair's cost discipline and hedging strategy give it a cushion. But the airline itself is cautious: it expects April-to-June fares to decline by mid-single-digit percentages, while July-to-September fares should be broadly flat. Unit costs could rise further if fuel stays high.
Ryanair shares were up 4.95% at $56.00 on Monday. Investors seem to like the profit growth and the debt-free outlook, but the fuel cloud is real. For now, Ryanair is flying high—but it's keeping an eye on the weather.
