Ryanair warns European fares could rise as oil prices stay elevated

Ryanair warned that sustained high oil prices could force a material increase in short-haul airfares across Europe, as competitors with weaker fuel-hedging may find it hard to keep capacity or survive the coming winter. To curb exposure to unhedged winter oil, the airline cut its passenger target for the period ending 31 March to 214 million, a slight reduction from the previous 216 million. Jet fuel is currently priced at about $140 per barrel, and Ryanair expects passenger volumes from November to March to remain roughly unchanged compared with the same period last year.

The carrier says its 80% fuel hedge at $67 per barrel will limit winter losses to between €70 million and €100 million, allowing it to post another profitable year, albeit below last year’s record after-tax profit. Meanwhile, Ryanair aims to boost summer traffic by over 5%, increasing passengers from 138 million to 145 million. The article also notes that rival Wizz Air reported a 25.9% month-on-month passenger increase, driven by higher capacity.