Ryanair Warns of Potential Fare Hikes Amid High Oil Prices

Ryanair has warned that short haul air fares in Europe could increase materially next year if oil prices remain high. The Irish budget carrier stated that some competitors with less fuel hedging may struggle to maintain capacity or could even go bankrupt during the coming winter season. Brent crude oil reached 97.04 dollars a barrel on Wednesday, the highest level since late July, following concerns over supply linked to clashes between the United States and Iran. The price later settled around 95 dollars.

To mitigate risks associated with unhedged winter oil, which is currently trading at 140 dollars a barrel, Ryanair reduced its passenger target for the business year ending March 31 from 216 million to 214 million. The airline expects this cut to its winter schedule to reduce losses by 70 million euros, bringing the total winter loss to 100 million euros. Despite this, Ryanair expects another profitable year because it hedged 80 percent of its jet fuel at 67 dollars a barrel. The company also anticipates that summer passenger numbers between April and October will increase by more than 5 percent, rising from 138 million to 145 million.

While the center and center left reports focus on the economic warnings and operational adjustments, the center left report includes additional context regarding a rival budget airline, Wizz Air, and a previous safety incident involving a passenger on a Ryanair flight.