Popular budget airline warns of rising prices should oil prices stay high

One of Europe’s most used budget airlines has warned that air fares could rise next year if oil prices remain elevated.

Irish low-cost carrier Ryanair has lowered its fiscal 2027 traffic target, forecasting that short-haul air fares across Europe will increase materially to reflect higher oil prices if elevated prices persist into summer 2027, as Caliber.Az reports, citing British media.

The company cut its passenger target for the year to March 31 from 216 million to 214 million customers. Ryanair said the reduction would help limit its exposure to “unhedged winter oil” during the traditionally unprofitable off-season, with jet fuel currently trading at around $140 a barrel.

Ryanair was quoted by British media as saying: “If high oil prices continue through to summer 2027, Ryanair believes short-haul air fares 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.”

The airline expects passenger numbers between November and March to remain broadly flat compared with the same period last year.

Brent crude, the global oil benchmark, touched $97.04 a barrel on September 2, its highest level since late July, after renewed clashes between the US and Iran fueled concerns over potential supply disruptions. The price later eased to just below $95 a barrel.

Ryanair expects its reduced winter schedule to cut winter losses by between €70 million and €100 million. However, because the airline has hedged 80% of its jet fuel at $67 a barrel, it expects to post another profitable year, although profit after tax is expected to fall below last year’s record.

The airline said it remained on track to increase summer passenger numbers, covering the April-to-October period, by more than 5%, from 138 million to 145 million. Fares were “modestly down” between August and September compared with the same period last year, in line with guidance issued in July.

The announcement came as rival budget airline Wizz Air reported on September 2 that its passenger numbers had increased by 25.9% last month compared with a year earlier, driven by an increase in flight capacity.

By Nazrin Sadigova