Ryanair ‘confident’ it will avoid jet fuel shortage but warns of future fare rises

Coverage Comparison

Two of Europe's largest budget airlines offered contrasting outlooks for the summer travel season, with Ryanair expressing confidence about fuel supplies while easyJet flagged weaker booking momentum.

Reports from The Guardian detailed Ryanair's position: the airline's chief financial officer, Neil Sorahan, stated he was "increasingly confident that we will not see any supply shocks this summer," according to the same report. This comes amid concerns about jet fuel availability following restrictions on shipping through the Strait of Hormuz, a key route for oil and fuel shipments.

In contrast, The Guardian's coverage of easyJet indicated that summer holiday bookings are trailing last year's levels, with the airline attributing this to consumer uncertainty linked to the conflict in the Middle East. The carrier also disclosed an unexpected additional £25m cost for jet fuel in March.

Key Claims

• Ryanair's fuel outlook: Ryanair is confident it will not face a jet fuel shortage this summer, with Sorahan expressing increased confidence in avoiding supply shocks. The airline noted that Europe is well-stocked with fuel from West Africa, Norway, and the Americas.

• Fare trends: Ryanair reported that fares have fallen in recent weeks due to uncertainty around the Middle East conflict, with prices expected to decline by a "mid-single digit percentage" in the three months ending in June. The company has also cut its outlook for summer fares, now expecting them to be "broadly flat" compared to last summer, after previously forecasting a modest increase. Sorahan warned that while bookings are strong closer to departure, late bookers could face higher fares.

• Ryanair's financial performance: The airline reported a record profit after tax of €2.26bn (£2bn) for its financial year ending in March, according to The Guardian's report.

• Hedging strategy: Ryanair has hedged 80% of its jet fuel requirements up to April 2027 at approximately $67 a barrel. EasyJet, meanwhile, has hedged 72% of its fuel needs for the next six months, covering the summer period through September, but has temporarily suspended short-term hedging due to elevated fuel prices.

• EasyJet's bookings and finances: easyJet reported that its summer holiday bookings are behind last year's levels, with many customers waiting until the month of departure to book. The airline posted a pre-tax loss of £552m for the six months to 31 March, compared with a loss of £394m in the same period the previous year. This loss is typical for the first half, as the carrier earns most of its profit in the summer months.

• Cost response: In response to higher fuel costs, easyJet has raised its minimum ticket fare and is actively reviewing discretionary costs, as reported by The Guardian.

Perspectives

Ryanair's view: The airline emphasizes confidence in fuel supply and strong demand, but acknowledges reduced visibility in bookings for July to September due to customers delaying reservations. The company warns that late bookings may lead to higher fares.

EasyJet's view: The airline acknowledges the impact of the Iran war on consumer confidence, leading to slower summer bookings. It stresses that it has not experienced fuel supply disruption and has adequate hedging in place, but has raised minimum fares to mitigate cost pressures.

Industry analyst perspective: Dan Coatsworth, head of markets at AJ Bell, commented that the market is "too fragile" to raise fares broadly, as airlines and holiday companies may need to drop or hold prices to sustain demand. He suggests that if cost pressures persist, price increases will become unavoidable, but Ryanair's strong balance sheet allows it to weather potential storms.

Consumer context: The reports indicate that holidaymakers are booking later than usual and showing increased interest in domestic trips, reflecting broader uncertainty and cost sensitivity amid the Middle East conflict and inflation.

Note: The coverage is based on reports from The Guardian, which provided details on both airlines. No conflicting information was found between the two articles, though they focus on different carriers.