Ryanair, the biggest low-fare airline in Europe, on Wednesday lowered its winter traffic target to reduce exposure to high unhedged oil prices, and warned the some of its less well-hedged competitors could struggle to survive this winter amid high fuel costs.
Since the Iran war slashed deliveries of crude oil and petroleum products from the Middle East, rising jet fuel prices have eaten into the profitability of all airlines globally.
Ryanair is one of the most hedged airlines, with about 80% of fuel costs hedged at $67 per barrel. However, the remaining unhedged 20% is highly exposed to the jet fuel prices currently trading at about $140 per barrel, Ryanair said in its August 2026 traffic stats.
In light of the high unhedged oil prices, “it is sensible to strategically reduce the Group’s exposure to unhedged jet fuel during the unprofitable winter schedule (from Nov. to Mar.),” the budget airline said.
Ryanair cut its winter traffic target to 214 million from 216 million passengers, expecting traffic to be broadly flat year-over-year.
“If high oil prices continue through to S.27, Ryanair believes short-haul airfares in Europe will increase materially to reflect higher oil prices, as some less well-hedged competitors will struggle to maintain capacity or even survive this coming winter season,” Ryanair said.
Major U.S. and European airlines have been also grappling with soaring jet fuel costs after the return of hostilities in the Middle East shattered the three-week-long U.S.-Iran ‘deal to make a deal’ in mid-July.
The fresh spike in jet fuel prices in July upended the profit guidance of U.S. airlines, whose management teams had to readjust earnings estimates for the year just days ahead of reporting second-quarter results.
In Europe, Lufthansa Group, Europe’s biggest airline, said in May it expects the surge in jet fuel prices to cost it an additional $2 billion this year as the closure of the Strait of Hormuz “is leading to a shortage in kerosene supply and thus to a significant increase in kerosene prices.”
Air France-KLM expects its fuel bill to jump by $2.4 billion this year.
By Michael Kern for Oilprice.com
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