Ryanair is slashing its winter schedule to dodge soaring jet fuel costs
The budget carrier trimmed its fiscal 2027 passenger target by 2 million, saying the move could cut winter losses by up to €100 million
Ryanair, the budget airline, has cautioned that escalating jet fuel prices could potentially lead to the downfall of several European rivals. The airline has implemented emergency measures to safeguard itself against the higher fuel costs arising from the Iran conflict. Ryanair has reduced its passenger targets for the year from 216 million to 214 million.
The Dublin-based company has managed to secure fixed-price contracts for 80% of its fuel requirements for the year. However, to offset the fuel costs, the carrier has decided to reduce the number of flights, which will help to lessen its losses for the winter period by €70 million to €100 million. Ryanair anticipates a summer traffic growth of over five percent to 145 million passengers.
The airline warns that some of its European competitors are more vulnerable to the soaring jet fuel prices due to the closure of the Strait of Hormuz. Ryanair expects that if high oil prices persist till next summer, short-haul airfares in Europe will see a significant increase, reflecting the higher oil prices. The firm believes that some less well-hedged competitors might struggle to maintain their capacity or even survive the upcoming winter season.
In July, Ryanair disclosed that the cost of the 20% of its fuel needs that were not fixed-price had more than doubled at the start of the year, reaching $150 per barrel. Consequently, the airline's operating costs surged by 11% to €3.8 billion in the three months to June, and its pre-tax profit plummeted by 36% to €593 million. In May, Ryanair announced a fare discount to increase passenger volumes in response to the dwindling demand caused by the Middle East conflict.
The airline is not alone in bearing the brunt of the Iran war. Tourism group Tui reported a €17 million loss in the six months to June, citing higher fuel costs and reduced travel demand. EasyJet suffered a £200 million hit to its profit in the three months to June, with fuel costs per passenger rising by £100 million or 13%.
Written by urgent.news from City AM's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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