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Fuel costs threaten winter forecast, so Ryanair reduces its traffic target

Ryanair, Europe's largest budget airline, cut its traffic target for fiscal 2027 on Wednesday in order to reduce the exposure to unhedged costs of fuel during winter. It also warned that annual profits would fall below their record-breaking level from last year.

This move shows how the 'crisis' in jet fuel caused by the conflict in the Middle East has reshaped European aviation. Many'major carriers are either keeping their capacity flat or reducing it before the typically loss-making winter season.

Ryanair said that if oil prices remain high through S.27 (summer of 2027), short-haul flights in Europe will 'increase materially, reflecting higher oil prices. Some less well-hedged competitors may struggle to maintain capacity or survive the winter season.

Ryanair, one of Europe's most well-hedged carriers, said that 80% of their jet fuel requirements were hedged until March 2027 for about $67 per barrel.

The airline reduced its fiscal 2027 target from 216 to 214 million passengers. The airline removed five aircraft in July from its Charleroi, Belgium base and reduced?2 millions seats from its Brussels schedule.

Dublin-based 'carrier', who said jet fuel is currently around $140 per barrel, will maintain winter capacity year-on-year to limit exposure to unhedged costs.

Ryanair stated that the 'profit after tax will be lower than last year's record levels, but added that it is too early to give a meaningful indication.

(source: Reuters)