Ryanair Cuts Winter Flights, Warns Rivals May Fail

Ryanair Cuts Winter Flights, Warns Rivals May Fail

The News

Ryanair, Europe's largest airline, cut its winter flying schedule on Wednesday to limit how much jet fuel it has to buy at today's prices — and warned that some of its competitors will "struggle to maintain capacity or even survive" this winter if oil stays high.

The carrier told investors it is bracing for unhedged jet fuel at $140 a barrel this winter, according to MarketWatch, which called the move a real-economy consequence of the energy crisis.

Ryanair also said short-haul airfares in Europe will rise "materially" if high oil prices run into 2027.

The Numbers

The average price of jet fuel has climbed 8.2% month-on-month to roughly $156 a barrel and is 74.2% higher than a year ago, according to the International Air Transport Association.

Ryanair says about 80% of its jet fuel for 2027 is already hedged at $67 a barrel, which it argues leaves it positioned for another profitable year even as rivals absorb spot prices.

Because unhedged fuel is expensive, the airline said it is "sensible" to cut exposure during the loss-making November-to-March schedule. It lowered its 2027 traffic target from 216 million passengers to 214 million.

Winter traffic will now be "broadly flat" against last year. Summer traffic, covering April through October, is still on track to grow more than 5% to 145 million passengers.

Timeline

Over the past year

jet fuel prices rose 74.2%, per IATA.

Recent weeks

oil prices ticked up again, which the Independent linked to an intensification of the conflict in the Middle East.

Past month

jet fuel rose another 8.2%, to about $156 a barrel.

Wednesday, September 2

Ryanair cut winter capacity and reduced its 2027 passenger target, warning of higher fares and weaker rivals. Reuters reported the airline expects both lower profit and fewer passengers as kerosene costs bite.

Reactions

Ryanair, in its statement: "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."

Rival Wizz Air, named in the coverage as one of the competitors in the frame, reported that its passenger numbers grew 25.9% last month compared with a year earlier, driven by a jump in flight capacity.

What's Next

The test is the winter schedule itself — November through March — when Ryanair says it will fly roughly the same number of passengers as last year instead of growing.

If oil holds at current levels into 2027, Ryanair's own forecast is the one to watch: materially higher short-haul fares in Europe, and pressure on carriers that locked in less of their fuel.

More

Hedging is the whole story here. Airlines buy fuel contracts in advance to fix a price; Ryanair's $67-a-barrel hedge on 80% of next year's fuel is roughly half the current spot level, which is why it can cut flights as a precaution rather than a rescue. Carriers without that cushion pay the $156 market rate on every gallon.

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