Ryanair Air Fares to Soar if Oil Prices Remain High
Ryanair has issued a warning that air fares in Europe will increase significantly next year if oil prices remain high. The airline, which is one of the largest low-cost carriers in Europe, said that some airlines may even go out of business due to their inability to absorb higher fuel costs.
The company has cut its passenger target for the current year from 216 million customers to 214 million, and expects a flat demand between November and March compared to the same period last year. This move is aimed at reducing Ryanair's exposure to 'unhedged winter oil' during the off-season, when jet fuel prices are typically higher.
Ryanair has hedged 80% of its jet fuel at $67 a barrel, which will help it record another profitable year despite the high oil prices. However, if oil prices remain above $140 per barrel throughout next year, air fares in Europe could increase significantly to reflect the higher costs.