Ryanair, Europe’s biggest low-fare airline, said on Wednesday that it was lowering its winter traffic target to reduce exposure to high unhedged oil prices, while warning that some less well-hedged competitors could struggle to survive this winter as fuel costs remain elevated.

The airline said rising jet fuel prices have squeezed profitability across the global airline industry since the Iran war reduced deliveries of crude oil and petroleum products from the Middle East. Ryanair said it is among the most hedged airlines, with about 80% of fuel costs hedged at $67 per barrel. The remaining 20% is unhedged and therefore highly exposed to jet fuel prices, which Ryanair said are currently trading at about $140 per barrel in its August 2026 traffic statistics.

“In light of the high unhedged oil prices, it is sensible to strategically reduce the Group’s exposure to unhedged jet fuel during the unprofitable winter schedule (from Nov. to Mar.),” the budget carrier said.

Ryanair cut its winter traffic target to 214 million passengers from 216 million, and said it expects traffic to be broadly flat year over year. For airlines, winter is typically a weaker travel period, so fuel costs can have a larger impact on routes and schedules when demand is softer and margins are already under pressure.

“If high oil prices continue through to S.27, Ryanair believes short-haul airfares in Europe will increase materially to reflect higher oil prices, as some less well-hedged competitors will struggle to maintain capacity or even survive this coming winter season,” the company said.

Major U.S. and European airlines have also been dealing with soaring jet fuel costs after the return of hostilities in the Middle East ended the three-week U.S.-Iran “deal to make a deal” in mid-July. The new spike in jet fuel prices in July disrupted profit guidance at U.S. airlines, whose management teams had to revise earnings estimates for the year just days before reporting second-quarter results.

In Europe, Lufthansa Group, the continent’s largest airline, said in May that it expected the surge in jet fuel prices to add another $2 billion to its costs this year as closure of the Strait of Hormuz “is leading to a shortage in kerosene supply and thus to a significant increase in kerosene prices.”

Air France-KLM has said it expects its fuel bill to rise by $2.4 billion this year.

By Michael Kern for Oilprice.com