Ryanair CEO says to brace for a 'significant uplift' in airfares as oil prices soar

Ryanair CEO: Brace for 'significant uplift' in airfares as oil prices rise Skip Navigation Markets Business Investing Tech Politics & Policy Video Watchlist Investing Club PRO Livestream Menu Key Points Ryanair's CEO Michael O'Leary said airfare prices will see a "significant uplift" next year. O'Leary said prices are "entirely up in the air" from December to March as jet fuel costs surge. The airline industry took a massive hit from the Iran war as consumers hesitate to travel. In this article RYAAY Follow your favorite stocks CREATE FREE ACCOUNT Passengers wait to board an aircraft of low cost Irish airline Ryanair at the Berlin-Brandenburg airport in Schoenefeld near Berlin, Germany, on March 13, 2024. John Macdougall | Afp | Getty Images Ryanair 's CEO warned Thursday that airfare prices may see "significant" hikes if oil prices remain elevated as the surging cost of jet fuel continues to squeeze the airline industry. "We expect pricing ​to be ​very ⁠modestly down in the second quarter (from July ​to September), but ​the ⁠December and March quarters are entirely up in the ⁠air," Michael O'Leary told reporters ahead of the company's annual general meeting, according to comments reported by Reuters. "If ​oil prices remain high into next year, I think there ​will be a significant ​uplift in airfares, and we would ‌hope ⁠to avoid that," O'Leary added. CNBC has contacted Ryanair for comment on the statements. Oil prices edged higher Thursday as worries over escalating tensions in the Middle East and their impact on energy supplies kept Brent crude above $100 a barrel. U.S. West Texas Intermediate crude futures were up 1.4% to $97.4 per barrel. The jump in oil prices has sent the cost of jet fuel — a crucial energy source for airlines — soaring. It was last at $171 per barrel for the week ending Sept. 4, up 90% from the prior year's average, according to the International Air Travel Association's Jet Fuel Price Monitor . In April, O'Leary told CNBC that there would be some "failures" in weaker European airlines later in the year as the cost of jet fuel becomes harder to absorb. watch now VIDEO 4:21 04:21 Ryanair CEO warns of European airline failures if jet fuel price stays high Squawk Box Europe The company said at the time that it had hedged 80% of its jet fuel for the summer period . For 2027, it is hedged at $67 per barrel, while for 2028 it has hedged only 15% of its needs at $85 per barrel. The budget airline's first-quarter profit took a 34% hit due to delayed consumer bookings after the start of the U.S.-Iran war on Fe. 28. O'Leary said at the time that first-quarter ticket prices were lowered as consumers became anxious to book amid the Middle East conflict. In April, he said: "We can guarantee people there'll be no price increases, no fuel hedging, no fuel surge levy surcharges, regardless of what happens to summer supply," he added. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.