Ryanair CEO warns European airfares could rise 20% over next year
Airfares across Europe could rise by as much as 20% over the next 12 months as airlines face soaring fuel costs linked to the war in the Middle East, Ryanair CEO Michael O'Leary warned at a press conference in Brussels on October 20, Bloomberg reported.
O'Leary predicted what he described as the largest increase in airfares in European aviation history.
“You’re going to see the biggest increase in airfares, I would say, in history in Europe in the next 12 months,” he said.
“The question is, will that increase in airfares be enough to cover the dramatically higher oil bills? I don’t think it will be.”
The Ryanair chief said European airlines were increasingly exposed to rising oil prices because they had limited protection through fuel hedging arrangements for next year.
“We’re 85% unhedged next year, and most of the other European airlines are in a similar position,” O'Leary said.
He also pointed to reduced airline capacity, financial difficulties among some carriers and higher taxes as additional pressures on the industry.
Bloomberg reported that Ryanair plans to reduce its operations in France and Belgium in response to higher taxes, while several European airlines are undergoing restructuring or consolidation as costs rise.
The warning follows earlier concerns from International Air Transport Association Director General Willie Walsh, who said in May that higher European airfares were inevitable because of elevated fuel costs and disruptions to oil supplies and refining in the Persian Gulf.
O'Leary's 20% estimate is a forecast, not an announced fare increase.
- Share: