Ryanair issues warning over oil prices
Ryanair has warned that some of its competitors will "struggle to maintain capacity or even survive" this winter if high oil prices continue into 2027. The Irish airline also said that short-haul airfares in Europe would be likely to increase "materially" under the same conditions.
The warning comes amid a fresh uptick in oil prices linked to a recent intensification in the conflict in the Middle East. According to the International Air Transport Association (IATA), the average price of jet fuel has risen 8.2% month-on-month to around 156 US dollars per barrel, and is 74.2% higher over the past year.
Ryanair scales back target, hedges fuel
To limit its use of expensive unhedged oil, Ryanair has cut its passenger target for 2027 from 216 million to 214 million. The airline said the high cost of unhedged fuel makes it "sensible" to reduce its exposure during the unprofitable winter schedule between November and March. As a result, air traffic over the winter period will be "broadly flat" compared with the previous year.
Ryanair stressed that about 80% of its jet fuel for 2027 is hedged at 67 US dollars per barrel, which it said makes it well placed to record another profitable year. The airline expects the cut to its winter schedule to reduce its winter losses by €70m (£60m) to €100m.
In a statement, the company said: "If high oil prices continue through to 2027, Ryanair believes short-haul airfares in Europe will increase materially to reflect higher oil prices, as some less well-hedged competitors will struggle to maintain capacity or even survive this coming winter season."
Summer growth on track
Despite the winter caution, Ryanair said it remains on track to grow its summer traffic for the period between April and October by more than 5%, to 145 million passengers. It also noted that fares are drifting "modestly down" between August and September compared with last year, as flagged in July.
Industry under pressure
The increased expenses for jet fuel have hit the industry, with easyJet, British Airways owner IAG, and Ryanair all reporting a fall in profits last month. Brent crude, the global oil benchmark, touched $97.04 a barrel earlier this week, the highest since late July, after renewed clashes between the US and Iran fuelled concerns over supply, before easing back to just below $95.
Rival Wizz Air reports growth amid volatility
Rival budget airline Wizz Air reported on Wednesday that its passenger numbers had grown by 25.9% last month compared with a year earlier, driven by a jump in flight capacity. The airline previously said it took a €50 million hit from the Iran war after having to cancel flights to Tel Aviv and other routes to the Middle East and Cyprus in March.
Wizz Air CEO Jozsef Varadi said the industry has been "extremely volatile" over the June quarter due to conflict in the Middle East, elevated fuel prices, and changes in booking patterns. He said the airline is focused on strengthening its core network, improving density, and reallocating flying from longer-haul Middle Eastern operations into shorter European sectors. While forward bookings continue to build up, Varadi said the rest of the year is expected to present "both industry challenges and strategic opportunities."
Recent safety incident
In a separate development, Ryanair was forced to reassure travellers in July that its planes were safe after a passenger was saved from being sucked out of a window mid-flight. Ljubisa Karović was sucked out headfirst after an engine failure resulted in parts smashing an acrylic window during a flight from Thessaloniki, Greece, to Memmingen, Germany. His wife, Svetlana Grković, saved her 61-year-old husband by holding on to his legs and managed to pull him back in with the help of two other passengers.