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Ryanair warns higher oil could push up European air fares next year

The airline cut its passenger target for the year ending March 31, to 214 million from 216 million, citing exposure to unhedged winter jet fuel.

Reported · Written up by our desk · Sectors

Ryanair warned that air fares across Europe could rise next year if oil prices stay elevated, adding that some airlines could struggle if fuel costs remain high.

The Irish budget carrier reduced its passenger target for the year ending March 31 to 214 million from 216 million to limit exposure to “unhedged winter oil” during the seasonal off period. Jet fuel was trading at about $140 per barrel, and Ryanair said it expects passenger numbers between November and March to be broadly flat versus the prior year.

Ryanair said it expects the winter schedule cut to reduce its winter losses by 70 million euros to 100 million euros, but projected another profitable year because it hedged 80% of its jet fuel at $67 per barrel. For the peak travel season, it expects to increase summer passenger numbers between April and October by more than 5%, from 138 million to 145 million, and it said fares have been drifting modestly down between August and September versus last year.

Brent crude, the global benchmark, rose to $97.04 per barrel on Wednesday before easing to just below $95, after renewed US and Iran clashes raised supply concerns, according to the report. The article also notes rival budget airline Wizz Air reported passenger numbers grew 25.9% in the prior month year over year, driven by higher flight capacity, and includes a separate in-flight safety incident involving Ryanair earlier this year.

Latest closeWTI crude $90.79 ▲5.9%|Brent $95.25 ▲5.3%

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