Ryanair CEO Michael O'Leary says airfares could rise significantly next year if oil prices stay high, as soaring jet fuel costs continue to weigh on the airline industry.
Speaking to reporters ahead of the company’s annual general meeting, O'Leary said pricing in the second quarter from July to September is expected to be slightly lower, but the outlook for the quarters ending in December and March remains highly uncertain. He said that if oil prices remain elevated into next year, ticket prices are likely to see a substantial increase, though the airline would prefer to avoid that outcome.
Oil prices moved higher on Thursday as concerns over rising tensions in the Middle East and the potential impact on energy supplies kept Brent crude above $100 a barrel. U.S. West Texas Intermediate crude futures gained 1.4% to $97.4 a barrel.
The increase in crude prices has also pushed jet fuel sharply higher. According to the International Air Travel Association’s Jet Fuel Price Monitor, jet fuel stood at $171 per barrel in the week ending Sept. 4, up 90% from the previous year’s average.
O'Leary had told CNBC in April that some weaker European airlines could face failures later in the year as higher jet fuel prices become harder to absorb. At the time, Ryanair said it had hedged 80% of its jet fuel needs for the summer period. For 2027, it is hedged at $67 per barrel, while for 2028 it has hedged only 15% of its needs at $85 per barrel.
The budget carrier’s first-quarter profit fell 34% after consumers delayed bookings following the start of the U.S.-Iran war on Feb. 28. O'Leary said earlier that anxiety linked to the Middle East conflict made travelers more cautious, forcing the airline to lower first-quarter ticket prices to support demand.
