The next 12 months will be "very difficult" for most airlines after Russia's invasion of Ukraine pushed up oil prices above $100 a barrel, Ryanair boss Michael O'Leary said on Wednesday 2 March as he reassured that the Irish airline was comfortably hedged.
Statement To Sky News
"I think it's going to be very difficult for most airlines for the next 12 months," O'Leary told Sky News. "We have hedged out about 80% of our fuel needs out to March 2023. So for this summer, and for the rest of this year, we'll still be able to pass on low oil prices and low fares to our customers because we have a very strong fuel hedging position."
Ryanair Boss Says Bookings Can Withstand Ukraine Crisis
The above news was followed by new that Russia's invasion of Ukraine will not have a dramatic impact on bookings in eastern Europe so long as the war doesn't escalate, Ryanair RYA.I boss Michael O'Leary said on Wednesday 2 March, adding that the airline was well-placed to deal with surging oil prices.
Ryanair, like others, suspended all of its flights to and from Ukraine last week as Moscow launched a full-scale invasion of its neighbour.
O'Leary said that bookings were down 20% on Thursday 24 February and Friday 25 February compared to the previous week and approximately 10% over the weekend, but believed that the short-term hit to demand would recover.
"I think you will not have a dramatic impact on bookings as long as the period of war doesn't escalate and spread elsewhere," O'Leary told reporters. "If nothing untoward happens, I expect (bookings) would be back to normal by next week."
Airlines, trying to recover from two years of the coronavirus pandemic, also face a potential hit to their earnings from surging oil prices that have risen to over $100 a barrel since the invasion.
O'Leary predicted bigger problems for his rivals, saying that Ryanair's strong recovery from two COVID-hit summers would be driven by our "somewhat fortuitous fuel-hedging strategy, which means we can pass on the benefit of oil at $65 a barrel for almost all of the next 12 months".
Ryanair is 80% hedged on fuel out to 2023, but rising prices will still cost the airline group approximately €50 million over the next 12 months, O'Leary said, adding that Ryanair would not introduce fuel charges for the summer.
O'Leary vowed that Ryanair would be the first airline back into Ukraine when it reopened, which could be this year, depending on the extent of damage to its airport infrastructure.
He also pointed to a huge increase in demand for flights to and from Polish cities as many Ukrainians attempt to reunite with their families, and predicted people in Britain and Ireland who had chosen domestic holidays over the last two years would be desperate to go abroad.
"I think you're going to see families returning to the beaches of Europe this year," he said. "They went to the beaches of the west of Ireland and Cornwall last year, and I think they never want to go back there again."
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