Ryanair group chief executive Michael O’Leary has said his airline is “better hedged than almost any other airline in Europe” with regard to oil prices.
Speaking at the company’s AGM in Dublin today, Mr O’Leary said Ryanair has hedged 80% of its oil costs at $67 dollars a barrel until next March.
The airline has also hedged a further 15% of its oil at $85 a barrel for the 2028 financial year.
Mr O’Leary said Ryanair “stopped hedging as oil prices rose in recent weeks”.
“We think oil prices will continue to be bumpy between now and the end of the year, so there is plenty of time to extend our hedges between now and Christmas if needed,” he said.
“It is unlikely oil prices will stay up at such high prices through the winter, but if they do there will be more airline failures,” he added.
The Ryanair CEO also nudged his airline’s outlook for average fares higher, saying they may rise slightly this winter following a “mild upturn” since July, although the outlook depended heavily on oil prices.
The airline’s average fares fell month-on-month from February to July, contributing to a slump in profits in its last financial quarter, as high oil prices raised costs.
Mr O’Leary said today, however, that fares had since risen by a “very low-single digit” amount year-on-year.
“In the last month, there’s been a slight upturn,” Mr O’Leary told a news conference. It is impossible to say what was causing the increase or whether it would be sustained, he added.
Average fares for the current quarter from July to September as a whole are set to fall by a very low-single-digit percentage year-on-year, he said.
That is a slight upgrade from his July prediction that falls were moving closer to mid-single digits than low-single digits.
For the winter season from October to March, he in July said fares were set to fall by low to mid-single digits in percentage terms, but that pricing might move to flat or even slightly higher if rivals reacted to oil costs by reducing capacity.
He said today that the flat-to-slightly higher scenario appeared more likely.
“A lot depends on what happens to oil prices for the next five or six months but – I would be reasonably hopeful that pricing will be flat-ish, maybe even slightly positive in the second half of the year,” he said.
Oil prices have this week risen above $100 a barrel as attacks increased in the US-Israeli war on Iran.
Ryanair cut flights from its winter schedule earlier this month to reduce losses and its exposure to unhedged fuel, resulting in a reduction of its fiscal 2027 traffic target to 214 million passengers from 216 million.
If oil prices remain high into next year, there will be a “significant uplift” in airfares, Michael O’Leary said.
Shares in Ryanair were lower in Dublin trade today.
Additional reporting by Reuters