The Finance Class

Business and stocks, explained in simple words.

Tag: Airlines

  • Ryanair Profit Falls 15% as Fuel Costs Soar, and Fares May Rise 20%

    Ryanair Profit Falls 15% as Fuel Costs Soar, and Fares May Rise 20%

    Ryanair is a budget airline. A budget airline sells cheap tickets. It flies people across Europe. On Monday, November 2, Ryanair shared its half-year results. A half-year result is a money report for six months.
    The news was mixed. More people flew with Ryanair. But the company made less money. Fuel got much more costly. That is the main reason.
    What Happened
    Ryanair’s profit fell 15%. Profit means the money left after a company pays its costs. Profit after tax was 2.15 billion euros. That is about $2.3 billion. A year earlier, it was 2.54 billion euros.
    But passengers grew. Ryanair carried 125.8 million people in the half year. That is 6% more than last year. Revenue rose 3% to 10.08 billion euros. Revenue means all the money a company brings in, before costs.
    So why did profit fall? Two reasons. First, average fares fell 4%. The average fare was 55.70 euros, down from 58 euros. A fare is the price of a ticket. Second, costs rose 10% to 7.69 billion euros. Fuel was the biggest problem.
    The Fuel Problem
    Airlines buy jet fuel to fly planes. Fuel prices move a lot. To protect itself, Ryanair locks in fuel prices in advance. This is called hedging. Hedging means making a deal now to pay a set price later. It is like buying winter coats in summer, when they are cheap.
    Ryanair locked in 80% of its fuel for this year at $67 a barrel. A barrel is a large unit for oil. That deal shielded it well. But the other 20% was not locked in. The price of that unhedged fuel doubled, to about $130 a barrel. The boss said jet oil is now $170 a barrel.
    Next year looks harder. Ryanair thinks its fuel bill for the year to March 2028 could rise by about 2 billion euros. It has locked in only 25% of next year’s fuel, at $95 a barrel. That is much less cover than this year.
    The boss, Michael O’Leary, gave a clear warning. He said fares across Europe could rise by 10% in 2027, and maybe up to 20%. He called next year a very big cost cliff for airlines. A cost cliff means costs jump up all at once.
    He also said higher short-haul fares alone may not cover the full fuel rise. Short-haul means short flights. So Ryanair is cutting costs too. It will review crew rations, which are food and perks for staff. It may freeze pay for a time. It will also use smart computer programs to work more efficiently.
    Other Numbers
    Ryanair held 2.6 billion euros in cash at the end of September. It had just repaid 1.3 billion euros of debt. Debt is money a company owes. The boss said the airline now has almost no debt and owns 650 planes.
    Ryanair also cut its passenger target for the full year. It now expects 214 million passengers, down from 216 million. It wants less flying in winter, when fuel costs bite hardest.
    Its shares rose 3.7% on the day of the news in Ireland. But the shares had fallen about 19% over the year before that. A share is a small piece of a company. When you own a share, you own a tiny part of that company.
    Why It Matters
    Ryanair is Europe’s biggest budget airline. When its costs rise, ticket prices often follow. Other airlines face the same fuel problem. So cheap flights may get less cheap in 2027. That matters to anyone who plans a holiday in Europe.
    What Happens Next
    Much depends on fuel prices and world events. If fuel stays costly, fares will likely rise. If fuel gets cheaper, the pressure eases. Ryanair will also try to cut costs and fly fuller planes. We will watch its next report for signs of change.
    Key figures:

  • Boeing Stock Falls About 9% as 737 Max Ramp-Up Slips to Late 2027

    Boeing Stock Falls About 9% as 737 Max Ramp-Up Slips to Late 2027

    INTRODUCTION

    Boeing had good news and bad news in its third-quarter results, and investors focused on the bad news. The company narrowed its loss sharply and grew revenue, but its shares fell about 9% during its earnings call. The reason was simple: Boeing said it will not significantly ramp up production of its best-selling 737 Max plane until the second half of 2027.

    WHAT HAPPENED

    Boeing reported a third-quarter net loss of $116 million, or 26 cents per share, compared with a $5.34 billion loss, or $7.14 per share, a year earlier. Revenue rose 4% to $24.19 billion, above the $23.84 billion analysts expected. Free cash flow rose to $464 million, up from $238 million a year earlier.

    But the adjusted loss per share, which strips out one-off items, was 34 cents, wider than the 21-cent loss analysts expected. And chief executive Kelly Ortberg said on the earnings call that Boeing is targeting a production rate of 52 planes a month only in the second half of 2027. The company is currently making about 47 Max planes a month.

    WHY IT HAPPENED

    The delay comes down to wings. Boeing has said that wing production is moving more slowly than expected, and stabilising production is taking longer than planned. Ortberg told CNBC that the company wants to get production right rather than go fast, saying, in effect, that everyone wants it to move faster but it will do the job properly.

    The commercial aircraft business also struggled. Its revenue fell 3% to $10.72 billion, and it posted a negative operating margin of 6.5%, which Boeing blamed on a less favourable mix of deliveries, higher expected costs from future production changes, and higher supply chain costs. Boeing delivered 161 commercial airplanes in the quarter, just one more than a year earlier.

    The defence business was the bright spot. Defence revenue jumped 15% to $7.94 billion, which helped narrow the overall loss.

    KEY FIGURES

    • Third-quarter net loss: $116 million, vs $5.34 billion a year earlier
    • Revenue: $24.19 billion, up 4%, vs $23.84 billion expected
    • Adjusted loss per share: 34 cents, vs 21 cents expected
    • Free cash flow: $464 million, vs $238 million a year earlier
    • Commercial aircraft revenue: $10.72 billion, down 3%
    • Commercial airplanes delivered: 161
    • Defence revenue: $7.94 billion, up 15%
    • 737 Max production now: about 47 a month; target: 52 a month in the second half of 2027
    • Shares: down about 9% during the earnings call

    WHY IT MATTERS

    Boeing only makes most of its money on a plane when it delivers it to an airline. That is why production speed matters so much. A delay of several months in ramping up from 47 to 52 planes a month means fewer deliveries, less cash coming in, and a slower recovery.

    It also matters for airlines. Many airlines are waiting for new 737 Max planes to grow their fleets and replace older aircraft. If Boeing delivers more slowly, airlines may have to keep older planes flying longer or wait longer to add routes.

    WHAT HAPPENS NEXT

    There was one piece of good regulatory news. The Federal Aviation Administration signed off on the 737 Max 10, after approving the 737 Max 7 in August. Those were the final certifications for the Max family. But certification is not the same as delivery, and Boeing still needs to prove it can build planes steadily at higher rates without quality problems.

    Investors will now watch three things: whether Boeing can stabilise production at 47 planes a month, whether wing output improves, and whether free cash flow keeps growing. Boeing expects to deliver 30 pre-built 737-7 and 737-10 aircraft starting in 2027, which could help cash flow in 2028 and beyond. But that is still a long way off.

    FINAL THOUGHTS

    Boeing’s quarter shows a company making real progress and still disappointing the market at the same time. The loss is much smaller, revenue beat expectations, and cash flow improved. But in the aircraft business, promises about future production matter as much as today’s numbers. Until Boeing can show it can build planes faster, and safely, investors will keep treating every delay as a reason to sell.

    Related post: https://thefinanceclass.wordpress.com/2026/10/30/ford-beats-earnings-2027-profit-flat-costs/

    Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice.

    Sources: CNBC, https://www.cnbc.com/2026/10/27/-boeing-ba-q3-2026-earnings.html; PrimeXBT, https://primexbt.com/news/boeing-stock-falls-9-as-737-max-ramp-up-slips-to-late-2027/

  • Frontier Airfares Jump 71% as Fuel Costs Soar and a Rival Disappears

    Frontier Airfares Jump 71% as Fuel Costs Soar and a Rival Disappears

    INTRODUCTION

    Flying with America’s largest budget airline is not as cheap as it used to be. Frontier Airlines said its average fare revenue per passenger jumped 71% in the third quarter, to $67.82, up from $39.74 a year earlier. The airline raised prices to deal with soaring fuel costs, and passengers kept booking anyway.

    WHAT HAPPENED

    Frontier reported record third-quarter total revenue of $1.355 billion, up 53% from a year earlier. It carried more than 9.8 million passengers, up 18%, or about 1.5 million more people than a year earlier. Capacity, which measures how many seats the airline flew, rose 18%.

    But higher prices did not turn into a profit. Frontier posted a net loss of $104 million in the quarter, wider than the $77 million loss a year earlier. The main reason was fuel. Its fuel bill soared 82% to $425 million. The airline paid an average of $3.96 per gallon for fuel in the quarter, 56% more than a year earlier.

    Including fees for bags and other extras, total revenue per passenger rose 30% to $138.22. That is an important detail: the 71% figure covers the ticket fare alone, not the full cost of flying.

    WHY IT HAPPENED

    Three things pushed fares higher, and Frontier’s chief executive Jimmy Dempsey said each played a roughly equal part. First, fuel got much more expensive, so the airline passed some of that cost to passengers. Second, Frontier got better at pricing, charging more on routes where demand was strong. Third, competition disappeared: Spirit Airlines stopped flying in May 2026, and Frontier added routes that Spirit used to fly, removing a direct low-fare rival from many markets.

    Fuel is the biggest pressure going forward. Frontier expects its average fuel cost to rise to about $4.75 per gallon in the fourth quarter. Industry airfares in September were already up about 22% from a year earlier, so Frontier’s jump is part of a wider trend, just a steeper version of it.

    KEY FIGURES

    • Average fare revenue per passenger: $67.82, up 71% from $39.74
    • Total revenue per passenger, including fees: $138.22, up 30%
    • Total revenue: $1.355 billion, up 53%, a third-quarter record
    • Passengers carried: more than 9.8 million, up 18%
    • Fuel bill: $425 million, up 82%
    • Average fuel cost: $3.96 per gallon in the quarter, vs about $4.75 expected in the fourth quarter
    • Net loss: $104 million, vs $77 million a year earlier

    WHY IT MATTERS

    Frontier is a test case for budget travel. The whole idea of a budget airline is low fares. When the cheapest airline raises its average fare by 71%, it shows how much pressure fuel prices are putting on the industry. It also shows that travellers are still willing to pay more, at least for now, since passenger numbers rose.

    It matters for holiday travel too. Frontier expects unit revenue, a measure of how much it earns per seat flown, to stay more than 20% higher in the holiday quarter. That points to fares staying well above last year’s levels through the holidays.

    WHAT HAPPENS NEXT

    Frontier forecast fourth-quarter results ranging from an adjusted loss of 15 cents per share to adjusted earnings of up to 5 cents per share. It also plans to keep capacity growth slower, at 5% to 6%, in the fourth quarter.

    The key question is fuel. If jet fuel prices stay high, fares will likely stay high as well. If fuel prices fall, Frontier could bring fares down, but with one less rival in the market, there is less pressure on it to do so quickly. Travellers booking holiday flights should compare the full price, including bag fees, rather than just the headline fare.

    FINAL THOUGHTS

    Frontier’s quarter tells a simple story: higher costs, higher fares, and still more passengers. The airline is making more money per passenger, but fuel is eating most of the gain. For travellers, the lesson is clear. Budget flying is still possible, but the gap between budget and regular airlines is getting smaller, and the cheapest ticket on the screen is rarely the full price you will pay.

    Related post: https://thefinanceclass.wordpress.com/2026/10/31/trump-energy-promise-gas-diesel-jet-fuel-prices/

    Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice.

    Sources: CNBC, https://www.cnbc.com/2026/10/28/frontier-airlines-airfare-plane-tickets.html ; Fast Company, https://www.fastcompany.com/91631443/a-budget-airline-just-revealed-a-startling-change-in-the-cost-of-flying

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