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‘peace’ will require the US to accept Iran’s position. Ryanair and easyJet quarterly
results gave the clearest indication yet of the war’s impact on travel. EasyJet reported a near 70%
year-on-year fall in profit for April to June last week, blaming half of a £201 million shortfall on extra fuel costs and the remainder on “softer demand”. Chief executive Kenton Jarvis
noted a 1% fall in average fares and described peak summer fares as “flat”, saying: “Fares would be more expensive if we were passing on fuel.” He reported bookings “strong in the month of departure but down before that”. Ryanair profits for April to
June were down 34% but still totalled €538 million, with average fares down 6% year on year. Group chief Michael O’Leary
said: “We’d hoped close-in bookings would dramatically recover. They’ve improved but not enough. The resumption of hostilities hasn’t helped. We’ll need more discounting.” O’Leary noted: “Before the
war, pricing looked like it would be up in the mid-single digits. I don’t expect a material change now. Fuel prices are going to be volatile up to the US mid-terms [elections in November].” At least domestically, the
new UK government offered the sector some stability with transport secretary Heidi Alexander and aviation minister Keir Mather remaining in post, and John Healey’s appointment as chancellor appeared to reassure the bond markets. However, the war’s resumption
has led to higher government borrowing costs anyway, making tax rises and spending cuts more likely this autumn.
Ryanair and easyJet tip modest winter growth
Ian Taylor
Ryanair and easyJet have warned of limited growth in capacity this winter and reductions on some routes as airlines struggle to recoup the higher cost of fuel due to the war in the Gulf. Michael O’Leary, Ryanair Group
chief executive, said: “We expect a lot of capacity to be taken out.” Speaking as Ryanair reported
a €538 million profit for the three months to June, O’Leary forecast: “Our competitors will take out a lot of capacity and that could mean a meaningful uplift in pricing. The only thing they can do to get fares up is to take out capacity.” He noted Aer Lingus has already
announced a 6% capacity reduction for this winter and said: “The short- term outlook is weak. Pricing is weak. I’m not optimistic [for October to March] but it depends on capacity reductions.”
Michael O’Leary and Kenton Jarvis Ryanair plans 2% capacity growth
this winter, with O’Leary insisting: “The weak near-term outlook is what it is. There is a war in the Middle East and oil price volatility. We see this as an opportunity. Our competitors have no choice but to cut capacity or withdraw from some markets.” EasyJet chief executive Kenton
Jarvis promised “a disciplined approach to growth” this winter and next summer when reporting easyJet’s third-quarter results for April to June.
He noted overall scheduled
capacity for the winter is currently 5% up year on year but said: “This is usually higher than what is actually flown. The fuel price is elevated so I would imagine capacity will be reduced.” Jarvis insisted: “We’ll be
moderating growth this winter. We’ve grown a lot in the last three winters to drive aircraft utilisation, and we’ve improved utilisation by 20%. I’ll be surprised if our capacity [this winter] ends any more than 2%-3% up.” He added: “It’s hard to know what
fuel is going to do. Pricing for the winter is up in the mid-single digits. How it remains depends [on what happens], but most airlines are looking to recover the increase in fuel prices.” EasyJet’s potential takeover is
due to move forward next week with the deadlines for a firm bid from US investment fund Apollo (August 7) and for a raised offer from rival fund Castlelake (August 3).
Heathrow results reveal impact of conflict in Gulf
Heathrow revealed a 25% drop year on year in passengers on flights to and from the Middle East in half-year results to June as a result of the US and Israel’s war on Iran. The decline came despite a small
rise (0.2%) in passengers overall, which took numbers in the first half of 2026 to a record 40 million, although traffic in the second quarter
62 30 JULY 2026
was down almost 3% year on year. The number of passengers flying
direct to and from Asia-Pacific rose almost 8% and traffic to and from Africa by 7% as a result of the loss of flights via the Gulf. Heathrow also recorded a 5.4%
increase in transfer passengers. Revenue rose 0.3% to £1.7 billion
but Heathrow’s first-half profit more than doubled to £447 million. Chief executive Thomas
Woldbye urged the new government “to make sure we can deliver” on a third runway and the CAA to “keep up momentum” on the price regulation to
Thomas Woldbye
underwrite investment in the runway. However, he criticised a proposal
to allow more than one terminal operator at an expanded Heathrow – a move backed by airlines – suggesting this could “undermine the passenger experience”.
travelweekly.co.uk
PICTURE: Shutterstock/Alexandros Michailidis
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