Ryanair CEO Predicts Airline Failures Amid Rising Fuel Costs

Ryanair Group CEO Michael O'Leary announced that the airline will not levy fuel surcharges on passengers despite soaring jet fuel prices. While Ryanair is currently absorbing price shocks through hedging agreements, O'Leary warned that airfares will rise materially by next year as oil prices, driven by Middle East tensions, move significantly upward.

O'Leary predicted that legacy carriers will introduce fuel surcharges and increase fares by 10% to 20% next summer as their hedging protections expire. He noted that if Ryanair hedges fuel at 100 dollars a barrel next year compared to 80 dollars this year, the company's oil bill could rise from six billion to seven-and-a-half billion dollars. To mitigate exposure to unhedged fuel costs, Ryanair reduced its fiscal 2027 passenger forecast from 216 million to 214 million, though it still targets 200 million passengers by fiscal 2028.

The CEO forecast accelerated consolidation in the European aviation market, suggesting that loss-making airlines will fail, potentially leaving only four major carriers: Ryanair, British Airways, Lufthansa, and Air France. This outlook follows the announcement that airBaltic is entering Chapter 11 bankruptcy. These warnings coincide with data from the International Air Transport Association reporting a 7.4% weekly increase in global jet fuel prices, with oil prices exceeding 100 dollars a barrel. Separately, Ryanair expects to receive its first 15 Boeing 737 MAX 10 jets next spring following imminent certification.