Ryanair reported a sharp decline in quarterly profits after rising fuel costs linked to the conflict in the Middle East and weaker consumer confidence affected its performance. The airline said passengers continued to travel but booked flights later than usual, forcing the company to reduce fares to maintain demand.

The Irish low-cost carrier said its pre-tax profit fell 34% to €593 million (£503 million) between April and June, while revenue edged up 1% to €4.4 billion. The company lowered ticket prices to attract customers, resulting in a 6% decline in average fares during the quarter.

Ryanair said higher jet fuel prices significantly increased operating costs after the United States and Israel launched strikes against Iran in February. Although the airline secured much of its future fuel supply through hedging agreements, it said fuel purchased outside those contracts now costs more than twice as much.

Iran-US: US Launches Ninth Consecutive Night of Strikes as Hormuz Tensions Deepen

The conflict also disrupted global energy markets. Crude oil prices climbed above $90 a barrel after renewed fighting between the United States and Iran before easing slightly. Shipping through the Strait of Hormuz, one of the world’s most important energy routes, has also faced major disruption.

The airline warned that its financial performance for the rest of the year remains highly vulnerable to external events, including further escalation in the Middle East or Ukraine and continued increases in unhedged fuel costs.

Shane Oliver, Head of Investment Strategy at AMP, said a prolonged closure of the Strait of Hormuz could push oil prices towards $150 a barrel if supply disruptions continue.

Ryanair expects fares during the peak travel season between July and September to remain slightly below last year’s levels. The airline said many customers now delay booking until closer to their departure dates because of ongoing uncertainty.

Finance Chief Neil Sorahan said demand for Ryanair’s popular Mediterranean routes remained strong despite the challenging market conditions.

“People are as keen to get away as ever, albeit booking just a little bit later,” he said.

Passenger numbers increased 6% to 6.1 million during the quarter, supported by Easter travel in April. However, the airline’s lower ticket prices offset much of the benefit from higher passenger traffic.

Ryanair said geopolitical tensions and energy market volatility will continue to shape the aviation industry’s outlook in the coming months.