Ryanair rejects fuel surcharges
Ryanair rules out fuel surcharges while warning that weaker rivals may raise fares.
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O’Leary said most airlines were hedged against fuel-price increases through summer 2026, but those protections are expiring and will leave carriers more exposed next year. Ryanair also has a small portion of its fuel requirements unhedged.
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O’Leary said he hoped jet-fuel prices would rise faster next year because that could hasten the failure of loss-making airlines and consolidation into four large groups: British Airways, Lufthansa, Air France and Ryanair.
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Ryanair is targeting 200 million passengers by fiscal 2028. Its Boeing order is for 150 737 MAX 10s, with options for another 150.
Ryanair will not impose fuel surcharges despite rising jet costs, Reuters reported. CEO Michael O'Leary said the airline is trimming its fiscal 2027 passenger target from 216 million to 214 million and cutting winter flights to protect margins. But he warned rivals will likely raise fares by 10% to 20% next summer as their fuel hedges expire and costs surge.
O'Leary predicted further airline failures and consolidation in Europe. He said jet fuel prices spiking to $194.90 per barrel — up 7.4% in one week — will force weaker carriers out of business and leave four giant groups standing: British Airways, Lufthansa, Air France, and Ryanair, Aviation Week reported.
Why Ryanair Avoids Fuel Surcharges When Rivals Cannot
Ryanair's cost structure lets it absorb fuel shocks that cripple competitors. Reuters reported most European airlines hedged fuel costs through summer 2026, but those protections are now expiring. Ryanair has 80% of its fuel for fiscal 2027 locked in at around $67 per barrel. Only 15% of fiscal 2028 fuel is hedged at $85 per barrel, leaving it more exposed — but still far better protected than legacy carriers like Lufthansa and Air France.
O'Leary said legacy airlines will have no choice but to raise fares. Investing.com quoted him directly: "I very much hope that jet fuel prices will rise faster into next year because that will accelerate the extent to which other airlines will fail." His strategy is to cut weaker routes now and position Ryanair as the only low-cost option left standing.
Winter Cuts and Summer Growth Reveal Ryanair's Confidence
Ryanair is cutting 550,000 seats to Estonia and Lithuania — a 25% reduction — due to rising airport costs, Clacton and Frinton Gazette reported. The airline is also trimming unprofitable winter flights across Europe to limit fuel exposure when demand is weak. These cuts drive down the 214-million-passenger target for fiscal 2027, down from the original 216-million forecast.
But summer 2027 will see capacity growth of 2% to 3%, Aviation Week reported. Ryanair is betting that rivals will cut service so sharply — or fail entirely — that low-cost travelers will have nowhere else to go. The airline is also taking delivery of 15 Boeing 737 MAX 10 aircraft starting spring 2027, which will further reduce its unit costs per seat.
European Consolidation Into Four Airline Giants Ahead
O'Leary openly welcomed higher fuel prices as a tool to eliminate financially weak competitors. Reuters reported he said fuel costs rising faster "will accelerate the extent to which other airlines will fail." AirBaltic recently entered bankruptcy protection, signaling the trend has already begun. Lufthansa reported an 88% drop in second-quarter profit to €123 million due to fuel and labor cost surges.
The result will be a consolidated market with just four dominant players: British Airways (IAG), Lufthansa Group, Air France-KLM, and Ryanair, O'Leary predicted. Passengers will face the steepest fare increases at legacy carriers — 10% to 20% by summer 2027 — while Ryanair maintains low fares and captures market share, UNN and DW reported.
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