Ryanair Warns Some Airlines Could Struggle with Jet Fuel Price Spike
Ryanair, the biggest low-fare airline in Europe, on Wednesday lowered its winter traffic target to reduce exposure to high unhedged oil prices, and warned the some of its less well-hedged competitors could struggle to survive this winter amid high fuel costs. Since the Iran war slashed deliveries of crude oil and petroleum products from the Middle East, rising jet fuel prices have eaten into the…
Ryanair, Europe's leading low-cost airline, has announced a reduced winter traffic target in response to soaring jet fuel prices. The budget carrier, which is one of the most hedged airlines, with about 80% of its fuel costs hedged at $67 per barrel, is concerned that its remaining unhedged 20% is highly exposed to the current jet fuel prices of around $140 per barrel.
Ryanair has cut its winter traffic forecast from 216 million passengers to 214 million, anticipating traffic to remain broadly flat year-over-year. The airline warned that some less well-hedged competitors could struggle to survive this winter due to high fuel costs, potentially leading to increased short-haul airfares in Europe as these airlines struggle to maintain capacity.
This comes after a recent spike in jet fuel prices following the return of hostilities in the Middle East, which has impacted profit guidance for major U.S. and European airlines.
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