Ryanair CEO says to brace for a 'significant uplift' in airfares as oil prices soar
Ryanair's CEO warned airfare prices may see significant hikes as the surging cost of jet fuel continues to squeeze the airline industry.
Ryanair chief executive Michael O’Leary warned Thursday that airline tickets could climb sharply if oil prices stay high, noting that the steep rise in jet‑fuel costs is tightening margins across the sector.
Outlook for Ticket Prices
Speaking to reporters before the carrier’s annual general meeting, O’Leary said the airline expects fares to dip only modestly in the second quarter, which runs from July through September. He added that the December and March quarters are “entirely up in the air,” and cautioned that a sustained increase in oil prices would likely force a “significant uplift in airfares, and we would hope to avoid that.” The comments were reported by Reuters.
Oil Market Pressures
Oil prices edged higher on Thursday as geopolitical tension in the Middle East raised concerns about energy supply disruptions. Brent crude traded above the $100‑a‑barrel threshold, while U.S. West Texas Intermediate futures rose 1.4 percent to $97.4 a barrel. The higher crude price has pushed jet‑fuel costs to $171 per barrel for the week ending 4 September, a jump of roughly 90 percent compared with the average level a year earlier, according to the International Air Transport Association’s Jet Fuel Price Monitor.
Hedging Strategy
Ryanair has tried to blunt the impact of volatile fuel costs through hedging. The airline disclosed that it has locked in 80 percent of its summer jet‑fuel requirements. For the 2027 period, the company secured fuel at $67 a barrel, while for 2028 it has hedged only 15 percent of its needs at $85 a barrel. These contracts are intended to shield the carrier from sudden price spikes.
Earlier Forecasts
In April, O’Leary told CNBC that weaker European airlines could face “failures” later in the year as they struggle to absorb rising jet‑fuel expenses. At that time Ryanair announced that it had hedged the majority of its summer fuel and promised that passengers would see no price hikes, no fuel‑hedging charges and no fuel‑surge levy surcharges, regardless of summer supply conditions.
Recent Financial Impact
The airline’s first‑quarter earnings suffered a 34 percent decline after the onset of the U.S.–Iran conflict on 28 February, which delayed consumer bookings. O’Leary explained that the company lowered ticket prices in response to traveler anxiety stemming from the Middle‑East hostilities. The profit hit underscores how quickly geopolitical events can translate into revenue pressure for low‑cost carriers.
Industry Context
The situation illustrates a broader challenge for airlines that operate on thin margins. When jet‑fuel costs surge, carriers must choose between absorbing the expense, passing it to passengers, or adjusting capacity. Ryanair’s leadership has signaled a willingness to protect fares where possible, but O’Leary’s latest remarks suggest that continued oil‑price strength could force a reassessment of that stance. Travelers should therefore monitor fuel‑price trends as a key factor shaping future airfare levels.
Source: cnbc.com · 2026-09-10