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Ryanair CEO: Winter fares could rise after a slight increase

Michael O'Leary, Chief Executive Officer of Ryanair, boosted the airline's forecast for average fares on Thursday. He said they could?rise?slightly?this winter, following a'mild increase' since July. However, this outlook was heavily dependent on oil prices.

As oil prices rose, the airline's costs increased. The result was a drop in profit in its last quarter.

O'Leary, on Thursday, said that since then, fares have risen "by a very low single digit" percentage year-over-year.

O'Leary said at a press conference that there had been a "slight upturn" in the last month. He said it was impossible to determine what caused the increase or if it would continue.

Slight Improvement from July Prediction

He said that the average fares from July to September for this current quarter will fall by very low single-digit percentages year-on-year.

This is an upgrade to his prediction from July that the falls would be closer to low single digits rather than mid-single numbers.

O'Leary said in July that winter fares would fall in the low- to mid-single-digit percentage range, but prices could go up or stay flat if competitors reduced capacity in response to rising oil prices.

He said that the scenario of a flat to slightly higher price was more likely on Thursday.

The oil price will determine a lot in the next few months, but it is not certain. He said that he was "reasonably hopeful" that prices would remain flat or even go slightly up in the second half.

The price of oil has risen to $100 per barrel this week as the U.S. and Israeli war against Iran intensified.

OIL RISES HIGHER - FARES WILL SOAR SIGNIFICANTLY

Ryanair reduced flights from its winter schedule in the first half of this month to cut losses and reduce its exposure to unhedged oil. This resulted in a decrease to its fiscal 2027 target traffic to 214 millions passengers from 216 million.

O'Leary stated that if oil prices continue to rise into next year there will be "a significant increase" in airfares.

O'Leary said that he believes there is plenty of time between now and Christmas to extend the hedges.

Ryanair, one of Europe's most well-hedged carriers, has hedged 80% through March 2027 for fuel at around $67 per barrel and 15% the following year for $85 per barrel.

(source: Reuters)