Ryanair warns rival airlines will ‘struggle to survive’ if soaring oil prices persist
The Irish airline says airfares on short-haul flights will increase ’materially’ if high oil prices continue into 2027
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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, which cut its 2027 air traffic target from 216 million to 214 million passengers to limit its use of expensive unhedged oil, says airfares on short-haul flights in Europe would also be likely to increase “materially”.
The warning follows 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 US dollars per barrel, and is 74.2 per cent higher over the past year, according to the International Air Transport Association (IATA).
Ryanair stressed that about 80 per cent of jet fuel for 2027 is hedged at 67 US dollars per barrel, making it well placed to record another profitable year.
However, it said the high cost of unhedged fuel means that it is “sensible” to reduce its exposure during the unprofitable winter schedule between November and March.
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.”
Ryanair added that it is still on track to grow its summer traffic, representing the period between April and October this year, by more than 5 per cent to 145 million.
The increased expenses for jet fuel have slammed the industry, with easyJet, British Airways owner IAG and Ryanair all reporting a fall in profits last month.
Rival Wizz previously said it took a 50 million euro (£42.9 million) hit from the Iran war after having to cancel flights to Tel Aviv in Israel and other routes to the Middle East and Cyprus in March. The airline has since reported an increase in passenger numbers by 25.9 per cent last month compared with a year earlier, driven by a jump in flight capacity.
Wizz 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.
“We are focused on strengthening the core network, improving density and reallocating flying from longer-haul Middle Eastern operations into shorter European sectors.
“While we continue to see the build-up of forward bookings, the rest of the year is expected to present both industry challenges and strategic opportunities.”
