US military carries out more strikes against ISIL fighters in Nigeria
US military conducts air strikes against ISIL fighters in Nigeria
Al Jazeera English1 min read
Ryanair ‘confident’ it will avoid jet fuel shortage but warns of future fare rises
TL;DR
Ryanair is confident it will avoid a jet fuel shortage this summer, despite concerns linked to the Iran war. However, the airline warns that holidaymakers could face higher fares later this year.
Key points
- Ryanair confident it will avoid jet fuel shortage this summer
- Fares expected to rise for later bookings
- Recent fare reductions due to Middle East conflict uncertainty
Ryanair is “confident” it will not face a jet fuel shortage this summer amid fears over widespread cancellations linked to the Iran war, but warned holidaymakers booking their flights later this year could face higher fares.
Neil Sorahan, the chief financial officer at the budget airline, said he was “increasingly confident that we will not see any supply shocks this summer”.
The airline said fares had fallen in recent weeks due to uncertainty around conflict in the Middle East, with prices expected to fall by a “mid-single digit percentage” in the three months ended in June.
The company also cut its outlook for fares this summer, with prices now expected to be “broadly flat” on last summer, after a previous forecast of a modest increase in the peak travel season.
“Demand is still strong, but people are leaving it longer to book so we do not have the visibility that we normally have for July to September,” Sorahan said.
“Closer-in bookings are strong but if people leave it late they could take on higher fares,” he added.
The travel industry has been hit by worries around jet fuel supply this summer, as shipping through the strait of Hormuz remains restricted. Ryanair said Europe is well stocked with fuel thanks to shipments from west Africa, Norway and the Americas.
The airline reported a record profit after tax of €2.26bn (£2bn) in its financial year ended in March.
However, it suspended guidance for its 2027 financial year, saying it was “far too early” to provide forecasts owing to potential increases in fuel, environmental taxes and wage bills.
While Ryanair has hedged 80% of its jet fuel requirements to April 2027 at about $67 a barrel, unit costs on fuel could still rise if prices remained higher, it said.
The company also flagged that it expected its environmental taxes in the EU to increase by €300m this year to about €1.4bn, “which makes EU air travel even less competitive”.
Shares in Ryanair, which are listed in Dublin, dropped by about 4% in early trading on Monday morning. The stock has lost more than a quarter of its value since the start of the year.
Q&A
Will Ryanair face a jet fuel shortage this summer?
Ryanair is confident it will not face a jet fuel shortage this summer.
Why are Ryanair fares expected to rise later this year?
Ryanair warns that holidaymakers booking flights later this year could face higher fares due to increased demand and booking delays.
How have Ryanair fares changed recently?
Ryanair fares have fallen in recent weeks due to uncertainty around the conflict in the Middle East, with prices expected to be broadly flat this summer.
