Ryanair's profit for the three months ended in June fell by more than a third. The reason was a drop in consumer confidence caused by the war in the Middle East, which forced the airline to cut fares even as costs rose due to soaring jet fuel prices, FT writes.

The budget carrier's net profit for the first quarter of the financial year amounted to €538 million, which is 34% lower than in the same period last year and below analysts' forecasts of €579 million.

The decline came amid a 6% drop in average fares and an 11% rise in operating costs, mainly due to more than a doubling in the cost of unhedged fuel volumes (Ryanair has hedged 80% of its fuel needs).

Chief executive Michael O’Leary said ticket prices “needed stimulation” because of “hesitation among customers, concerns about jet fuel shortages in the EU, economic uncertainty, and bookings shifting to later dates.”

The company declined to give financial guidance for the full 12-month period (through March 2027), noting that ticket sales revenue “depends heavily” on booking activity in August and September.

In the current quarter, ticket prices are still “moderately lower” despite a recent increase in bookings, the company said.

“If we get the opportunity to sell tickets at higher prices, we’ll gladly take it. Those who book at the last minute pay more, but for more distant dates we have to stimulate demand with discounts,” chief financial officer Neil Sorohan told the Financial Times.