Key facts
- Ryanair warns soaring jet fuel prices could lead to the collapse of some European competitors.
- The airline has secured fixed-price contracts for 80% of its fuel needs for the coming year.
- Ryanair is cutting some flights to reduce fuel purchases at market rates, expecting to soften winter losses by €70m to €100m.
- Ryanair expects airfares in Europe to increase materially next summer if high oil prices persist.
- Brent crude touched $97.04 a barrel, its highest since late July, due to concerns over supply amid US-Iran clashes.
Ryanair, Europe's largest low-fare airline, has warned that soaring jet fuel prices, exacerbated by the Iran war and renewed clashes between the US and Iran, could lead to the collapse of some European competitors. The airline has lowered its winter traffic target to 214 million passengers from 216 million to reduce exposure to high unhedged oil prices.
Jet fuel is currently trading at approximately $140 per barrel, while Brent crude touched $97.04 on Wednesday, its highest level since late July, due to supply concerns stemming from US-Iran tensions. Ryanair has hedged 80% of its fuel costs at $67 per barrel, but the remaining 20% is exposed to current market prices.
The budget airline expects passenger numbers between November and March to remain broadly flat year-over-year. Ryanair believes that if high oil prices persist through to summer 2027, short-haul airfares in Europe will increase materially, as less well-hedged competitors may struggle to maintain capacity or survive the winter season. The reduction in its winter schedule is expected to decrease Ryanair's winter losses by €70 million to €100 million.
Major U.S. and European airlines are also contending with elevated jet fuel costs. Lufthansa Group anticipates an additional $2 billion in fuel expenses this year, while Air France-KLM expects its fuel bill to rise by $2.4 billion. The spike in jet fuel prices in July had previously disrupted profit guidance for U.S. airlines.