Ryanair CEO pledges not to hit passengers with fuel surcharge

By Joanna Plucinska

LONDON, Sept 23 (Reuters) - Ryanair group CEO Michael O'Leary said on Wednesday the airline "will not levy a fuel surcharge" despite higher jet fuel prices, but predicted rivals will do so next summer and forecast more European consolidation as a result of the elevated costs.

Global airlines have struggled with the spiralling cost of jet fuel, with airBaltic the latest to announce it was entering Chapter 11 bankruptcy proceedings.

Meanwhile, Ryanair cut its forecast for passengers flown from 216 million to 214 million for fiscal 2027 as a result of planned limits to capacity in an effort to lessen the impact of its small percentage of unhedged jet fuel. 

O'Leary said Ryanair was in a strong position to weather further challenges associated with high jet fuel prices.

"Most of the airlines were well hedged into the summer of 2026, and therefore we absorb the kind of shock of the much higher oil prices this summer," he told reporters.

"None of us will be able to absorb those much higher oil prices next year ... and it will get passed on in the form of fuel surcharges on higher airfares.

"Ryanair will not levy a fuel surcharge, but the legacy guys certainly will next summer."

O'Leary said he expected more carriers to fail, adding that Ryanair was already in talks with airports concerned that capacity will be cut by further airline bankruptcies. 

"I very much hope that jet (fuel) prices will rise faster into next year because that will accelerate the extent to which other airlines will fail," he said, adding that he expected airfares at other carriers to rise by 10% to 20% next summer. 

"Airlines who are currently loss-making will fail. It will accelerate the consolidation of Europe into four large airlines: BA (British Airways), Lufthansa, Air France and Ryanair," he said.

(Reporting by Joanna Plucinska; writing by Sam Tobin; editing by Sarah Young and Alexander Smith)