Ryanair Holdings plc (RYAAY) stock rose in Monday's premarket trading after the airline reported better-than-expected fiscal second-quarter results, even as higher fuel costs and lower fares weighed on first-half profits.

Ryanair reported fiscal 2027 first-half results, with profit after tax falling 15% year over year to 2.15 billion euros. Revenue rose 3% to 10.08 billion euros.

For the fiscal second quarter, earnings of $3.63 per share beat the analyst estimate of $3.49. Revenue of $6.67 billion topped expectations of $6.47 billion.

Quarterly revenue rose 4% to 5.70 billion euros, while profit after tax declined 6% to 1.61 billion euros.

Passenger Growth Fails To Offset Lower Fares

First-half passenger traffic increased 6% to 125.8 million, while the load factor remained at 95%.

Average fares fell 4% to 55.70 euros. Scheduled revenue rose 1% to 7 billion euros, while ancillary revenue climbed 6% to 3.08 billion euros.

Ryanair attributed weaker fares to the timing of Easter and cautious consumer spending amid the Middle East conflict.

Higher Fuel Costs Hit Earnings

Operating costs increased 10% to 7.69 billion euros, while operating profit declined 16% to 2.40 billion euros.

Fuel and oil costs jumped 15% to 3.40 billion euros as prices for the airline's unhedged jet fuel doubled.

Ryanair has hedged about 80% of its fiscal 2027 fuel requirements at approximately $67 per barrel. Fiscal 2028 hedge coverage stands at 25% at about $95 per barrel.

Fleet Expansion And Outlook

Ryanair plans to launch 126 additional routes and open a new base in Rimini for summer 2027.

The airline expects its first 16 Boeing MAX-10 aircraft by summer 2027, offering 20% more seats while using 20% less fuel.

Gross cash stood at 2.6 billion euros, while net cash totaled 2 billion euros.

Ryanair expects fiscal 2027 passenger traffic to rise 3% to 214 million, with fiscal 2028 traffic exceeding 220 million.

Third-quarter fares are trending modestly higher, although the airline said it is too early to provide meaningful full-year profit guidance.

CEO Michael O'Leary warned that European airfares could rise by double digits in 2027 as soaring fuel costs squeeze airline profits. He said Ryanair would need a roughly 20% fare increase to offset an estimated 2 billion euro rise in its fiscal 2028 fuel bill, although he cautioned that fares may not climb enough to cover the additional costs.

The airline is reviewing airport costs, labor agreements and staffing levels while exploring artificial intelligence to improve productivity.

RYAAY Price Action: Ryanair shares were up 1.92% at $54.75 during premarket trading on Monday, according to market data.