Ryanair chief warns airfares could rise by up to 20%

Ryanair chief executive Michael O’Leary has predicted the biggest increase in European airfares in history over the next 12 months, as conflict in the Middle East drives up oil prices.

Speaking at a press conference in Brussels, O’Leary said fares could rise by as much as 20% next year. However, he warned that higher ticket prices and fuel surcharges may not be enough to cover airlines’ rising costs, putting pressure on profit margins.

Ryanair is 85% unhedged against fuel price increases for next year, O’Leary said, adding that many other European airlines were in a similar position. Higher taxes and reduced capacity are also adding to the pressure on the industry.

He said Ryanair would reduce its presence in markets including France and Belgium in response to increased taxes, while predicting further consolidation as financially weaker airlines struggle. Several European carriers are already restructuring, while Lufthansa has agreed to acquire a stake in Portugal’s TAP.

Ryanair shares fell by as much as 2.2% in Dublin trading, extending their decline for the year to about 25%.

O’Leary also said the airline expects its first Boeing 737 Max 10 aircraft in January, with around 16 more due to arrive by April.

The post Ryanair chief warns airfares could rise by up to 20% appeared first on The Leader - The No. 1 Spanish Newspaper - Spain News, Sport, Spanish Property for Sale, Business Directory, Classifieds, and Advertising.