Ryanair, the largest low-cost airline in Europe, has warned that some airlines may struggle this winter due to high jet fuel prices. The company has lowered its winter traffic target from 216 million to 214 million passengers to reduce exposure to high prices.
Ryanair states that about 80% of its fuel costs are hedged at $67 per barrel, but the remaining 20% is unhedged and highly exposed to current jet fuel prices around $140 per barrel.
The airline believes that if high oil prices persist, short-haul airfares in Europe will increase significantly as some less well-hedged competitors may struggle to maintain capacity.
