The conflict in the Middle East has driven up aviation fuel prices and suppressed passenger travel demand, leading to a sharp decline in profits for Ryanair.

The Irish airline reported a 34% drop in pre-tax profit to €593 million (approximately £503 million) for the period from April to June this year. Revenue for the same period remained largely flat, as the company was forced to cut airfares to stimulate passenger traffic.

Ryanair also indicated that, due to public caution regarding air travel, average ticket prices for this summer are expected to be slightly lower than those of the previous year.

Following military strikes by the United States and Israel against Iran in February, aircraft fuel costs surged dramatically. Although Ryanair had hedged a significant portion of its future fuel purchases through forward pricing agreements, the price of fuel not covered by these contracts more than doubled.

After intense exchanges of fire between the US and Iran over the weekend, international oil prices continued to climb overnight, breaking through $90 per barrel (around £67) for the first time in a month.

Shipping through the Strait of Hormuz, a critical global chokepoint for oil and gas transportation, has nearly ground to a halt.

The international crude oil benchmark, Brent crude, rose by 2.5% on Monday.

The airline warned that its full-year performance is highly susceptible to external geopolitical developments, including potential escalations in conflicts in the Middle East and Ukraine, as well as fluctuations in the price of unhedged aviation fuel.

Shane Oliver, Head of Investment Strategy at asset manager AMP Capital, analyzed: "The longer the Strait of Hormuz remains blocked and the conflict escalates, the more likely oil prices are to surge towards $150 per barrel, suppressing demand to match the supply shortfall."

He added: "This is not our base case scenario, but the risk has increased significantly at present."