Ryanair boss Michael O’Leary has warned that air fares this summer will be “materially higher” due to soaring oil prices and Covid effects.
He said the impact of the Ukraine crisis on oil prices was “steep and severe”.
Airlines also had fewer seats available after cutting capacity during the Covid pandemic, he said.
In February Air-France KLM warned of airlines pushing up prices as they face rising overheads.
Crude oil prices are surging as markets react to Russia’s invasion of Ukraine. Oil and gas is still flowing from Russia, but there’s concern that sanctions could tighten supply, or that Russia could decide to restrict supplies.
Mr O’Leary said that Ryanair was largely insulated from surging prices due to fuel-buying agreements until 2023 that cap the cost for 80% of its fuel.
However, price rises on the remaining fifth of its fuel mean Ryanair expects to pay an extra €50m (£42m), he said.
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Short-haul capacity in Europe would be reduced by 10% this summer, and that would also drive higher fares in the peak months, when prices would be “materially higher”, he said.
Mr O’Leary predicted that air fares would be 10% to 15% higher than pre-Covid in June, July, August and September and accommodation would also be more expensive.
“I think you’re going to see families returning to the beaches of Europe this year,” due to pent up demand, he added.
The warnings echo those made by the UK boss of Air France-KLM Fahmi Mahjoub in February, who said his airline faced significantly higher fuel and airport costs, and as a result higher air fares were “quite unavoidable”.
Speaking to reporters on Wednesday, Mr O’Leary said his airline would be the first to fly to and from Ukraine again, when it was safe to do so and airspace reopened.
But he said that may not be until the winter. Russia has taken out most of the radar infrastructure at Ukrainian airports, he said, adding that he wanted to see the Ukrainians “succeed”.
Mr O’Leary said on Tuesday that Ryanair had started flying medical supplies and humanitarian aid in the hold of flights to south eastern Poland, free of charge, on behalf of Irish and UK humanitarian agencies.
Ryanair has seen a significant surge to and from Polish airports.
Mr O’Leary said a lot of people who had come across the border from Ukraine to Poland “are flying across Europe reuniting with friends and family”. He said Ryanair was keeping air fares low because it wanted to play its part in reuniting them.
Before the crisis, Ryanair was the biggest airline flying to Ukraine, serving four airports there. It had expected to fly two million passengers on those routes this year.
He also said Ryanair carrying humanitarian supplies was “for the first time in 30 years”.
Mr O’Leary added that Ryanair flight bookings had dropped 20% when the invasion began and were still about 10% down.