Ryanair seeks to squeeze rivals as Ukraine war lifts fuel prices

Bloomberg

Ryanair Holdings Plc Chief Executive Officer Michael O’Leary said fuel hedging and cost curbs will help it put the squeeze on rivals this summer as the Ukraine invasion adds to a slew of challenges facing airlines.
While Ryanair saw bookings drop 20% after Russia launched its attack, sales have already begun to recover and Europe’s biggest discount carrier still expects a bumper Easter and summer, O’Leary told Bloomberg TV.
Ryanair’s strong hedging position will allow it to keep down prices even as competitors are forced to raise fares in response to the spiraling cost of crude, the CEO said. Its price advantage should draw customers, despite growing concerns about higher household bills from inflation — the other major threat to a travel rebound from the coronavirus pandemic.
“People are more price sensitive and we have the lowest fares,” O’Leary said. “We’re in good shape to pass on savings and we’re seeing it in our bookings. There’s a huge number of airlines in Europe that are unhedged.”
Shares of Ryanair traded 2.1% lower in Dublin, extending the decline this year to 10%. Budapest-based Wizz Air Holdings Plc, the biggest discount airline in Eastern Europe, slumped 6.1% and is down 33% for the year.
O’Leary said that Dublin-based Ryanair is 80% hedged at $63 a barrel through March next year. Among its closest rivals, Wizz in particular has generally eschewed hedging since the pandemic. Ryanair’s hedge falls to 9% at $74 for summer 2023.
Ryanair served four airports in Ukraine prior to the war, carrying about 2 million passengers a year, and O’Leary said he’ll redirect planes that flew there from Germany, Poland and Romania to Mediterranean sunspots such as Greece, Spain, Italy and Portugal.