Ryanair boss Michael O’Leary has said “it is inevitable” that the price of air tickets will increase over the summer.
he airline’s chief executive said this will mainly affect other carriers, as Ryanair is in the “favourable” position of having 80 per cent of its fuel guaranteed for a year.
“I think it is inevitable that prices will rise in the summer, particularly if oil remains at 100 dollars per barrel”, O’Leary is quoted as saying in an interview with Agência Lusa, in Brussels.
Ryanair is in a very favorable situation, as we (have) about 80 per of our fuel until March 2023 [purchased] at between 64 and 73 dollars a barrel.”
O’Leary added that he predicts “price increases coming mainly from other airlines that are not well covered and that will have to pass on these much higher oil prices”.
“We are not ‘price takers’ (companies that have little or no control over the price of its products) and therefore, we manage our business to fill our flights.”
Soaring fuel prices in recent weeks have reached the highest levels of the last decade due to fears of reduced supply caused by the Russian invasion of Ukraine.
The increase in the price of fuel, which represents up to 35 per cent of airlines’ operating costs, has put pressure on the aviation sector, which is still trying to recover from the consequences of the Covid-19 pandemic, resulting in more expensive plane tickets.
In the interview with Lusa, O’Leary also revealed that the war in Ukraine had led to the cancellation of thousands of the low-cost airline’s flights to and from the country.
A total of more than 2,000 flights were canceled between February 24 and March 26, on an average of 50 daily routes, with a total loss of 300,000 passengers in March alone.
In addition, “there has been a decline in traffic bound for Eastern Europe, such as Poland, and the number of visitors to Poland, Slovakia and Romania and the Baltic States are down,” O’Leary added.
However, “there is an increase in the number of flights out of these countries, mainly of Ukrainian refugees trying to meet friends and family across Europe,” he added.
Despite the challenges, Ryanair is targeting at least €1bn in profit for the coming year as pent-up demand buoys summer sales.
Europe’s biggest discount airline expects to return to profitability and reach a goal of carrying 165m passengers in the 12 months from April 1, provided there’s no major coronavirus flare-up and disruption from the war in Ukraine is contained, O’Leary said.
“We’d be disappointed if we don’t do somewhere north of a billion in profits in the next 12 months,” O’Leary said in an interview on the fringes of an Airlines for Europe trade group meeting.
“A lot of that is driven by advantageous fuel hedging. But it all depends on how strong the recovery is this summer.,” he added.
Download the Sunday World app
Now download the free app for all the latest Sunday World News, Crime, Irish Showbiz and Sport. Available on Apple and Android devices