Ryanair warns on airlines' futures amid high oil prices

Budget airline Ryanair has warned competitors could “struggle to maintain capacity or even survive” over the winter if oil prices remain high.

The Irish carrier says airfares on short-haul flights are also likely to increase “materially” if high oil prices continue into 2027.

It also cut its air traffic target for next year on the back of efforts to use less unhedged fuel over the winter period.

The warnings come after a fresh uptick in oil prices linked to a recent intensification in the conflict in the Middle East.

The average price of jet fuel has risen 8.2 per cent month-on-month to around $156 per barrel and is 74.2 per cent higher over the past year, according to the International Air Transport Association.

Ryanair stressed around 80 per cent of jet fuel for 2027 is hedged at $67 per barrel, making it well placed to record another profitable year.

However, it said the high cost of unhedged fuel means it is “sensible” to reduce its exposure during the unprofitable winter schedule between November and March.

As a result, Ryanair has reduced its 2027 air traffic target from 216 million to 214 million passengers to limit its use of expensive unhedged oil.

Air traffic over the winter period will be “broadly flat” compared with the previous year as a result.

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.”

The carrier added it is still on track to grow its summer traffic, representing the period between April and October this year, by more than five per cent to 145 million.

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