By Benson Daniel
European airfares could rise significantly next year if crude oil prices remain elevated, Ryanair has warned, as the surge in fuel costs begins to reshape the operating plans of airlines across the region.
The Irish low cost carrier said sustained high oil prices through the summer of 2027 could force short haul fares higher as airlines struggle to absorb rising fuel expenses.
Ryanair has already responded to the pressure by reducing its passenger target for the financial year ending March 2027 from 216 million to 214 million passengers.
The airline said the adjustment was aimed at limiting its exposure to unhedged fuel costs during the winter season, traditionally a weaker period for European airlines.
Jet fuel prices are currently around $140 a barrel, significantly increasing the cost of operating flights at a time when airlines are also dealing with uncertainty over demand and capacity.
Ryanair expects passenger traffic between November and March to remain broadly flat compared with the same period last year as it trims its winter schedule.
The reduction in capacity is expected to lower the airline’s winter losses by between €70 million and €100 million.
The airline is in a stronger position than many competitors because it has already hedged about 80 per cent of its jet fuel requirements through March 2027 at roughly $67 a barrel.
That protection provides Ryanair with some insulation from the current fuel price surge, although the company expects its profit for the year to come in below the record level recorded in the previous financial year.
Ryanair warned that airlines with less protection against fuel price increases could face a much more difficult operating environment.
Some carriers may be forced to reduce capacity, increase fares or reconsider routes if high fuel costs persist into the next summer season.
The warning highlights how sharply higher energy prices can affect the aviation industry. Fuel is one of the largest operating expenses for airlines, meaning sustained increases can quickly put pressure on ticket prices and profitability.
The situation is also being influenced by heightened geopolitical tensions in the Middle East, which have pushed crude and refined fuel prices higher amid concerns about disruptions to global energy supplies.
Brent crude briefly climbed above $97 a barrel on Wednesday before easing below $95, adding to concerns among airlines about the cost of fuel heading into the winter season.
For passengers, the potential impact could become more noticeable next year if airlines pass a larger share of their fuel costs on to travellers.
Ryanair said fares had been modestly lower in recent months, but warned that this could change if the current oil price environment persists.
Despite the pressure, the airline expects its summer passenger numbers to increase by more than five per cent, rising from 138 million to about 145 million.
Ryanair also reported that it carried 22.2 million passengers in August, up six per cent from 21 million a year earlier, while its load factor remained at 96 per cent.
The contrasting outlook between stronger summer demand and weaker winter expectations shows the delicate balance airlines are trying to maintain as fuel prices rise.
For the wider European aviation market, continued increases in oil prices could lead to fewer flights, higher operating costs and more expensive tickets, particularly on short haul routes where competition has traditionally kept fares low.
The industry will therefore be watching developments in global oil markets closely, with the direction of fuel prices likely to determine whether airlines can maintain current fares or are forced to pass higher costs on to passengers.
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