Ryanair Warns 10–20% Summer Jet Fuel Shortfall at $195/Bbl Could Ground Flights
Ryanair CEO warns a 10%–20% jet fuel supply shortfall this summer could force flight cancellations after jet fuel surged to $195 per barrel. The airline has hedged 80% of its fuel needs at $67 per barrel through March, cushioning costs but not physical availability constraints.
1. CEO Warning and Flight Risk
Ryanair’s CEO delivered a stark warning that if jet fuel supplies tighten by 10%–20% this summer, the airline may be forced to cancel flights. He emphasized that this risk is out of the ordinary, reflecting both commodity and capacity strains on Ryanair’s network.
2. Supply Disruption Driving Prices
The disruption stems from conflict involving Iran threatening the Strait of Hormuz, a corridor handling roughly 20% of global oil flows. Jet fuel prices have spiked to about $195 per barrel, more than double last year, while Brent crude briefly topped $100.
3. Ryanair’s Fuel Hedge Buffer
Ryanair has hedged approximately 80% of its projected fuel needs through March next year at about $67 per barrel, shielding most costs. However, physical availability beyond late May remains uncertain as suppliers refuse long-term commitments.
4. Traffic Growth Outlook and Competitive Impact
Despite the risk, Ryanair still forecasts 5% passenger growth for April to June and modest fare increases of 3%–4%. Competitors with lower hedge ratios face greater margin erosion and may struggle to maintain schedules under similar shortages.