Ryanair Warns Airlines May Face Challenges Due to Rising Jet Fuel Prices
Ryanair has lowered its winter traffic target in response to rising jet fuel prices, which have been driven by disruptions from the Iran war and reduced oil deliveries. The airline is one of the most hedged in Europe, with about 80% of its fuel costs secured at $67 per barrel, but it remains exposed to higher unhedged prices currently near $140 per barrel. Ryanair has cut its winter passenger target from 216 million to 214 million and warned that some less well-hedged competitors may struggle or even fail this season due to the financial strain of high fuel costs. The impact is not limited to Europe, as U.S. airlines have also been affected by soaring jet fuel prices following renewed hostilities in the Middle East. Lufthansa Group expects an additional $2 billion in annual fuel costs, while Air France-KLM anticipates a similar increase of $2.4 billion this year due to kerosene shortages and price surges linked to the Strait of Hormuz closure.
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Topics: airline profitability hedging strategies jet fuel prices winter traffic targets