Ryanair has warned that air fares will rise materially across Europe next year if oil prices remain high, as it cuts winter flights to reduce losses. The airline cut expected passenger numbers for the 12 months to next March from 216 million to 214 million. While the airline has hedged 80 per cent of its fuel costs until March, capacity cuts will reduce winter season losses from 170 million to around 100 million euros. "In light of high unhedged oil prices" currently trading around $140 a barrel, it was sensible to reduce exposure to unhedged jet fuel during the unprofitable winter schedule, it said.

If high oil prices continue through to summer 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." The airline has frequently predicted the collapse of low-cost rival Wizz Air, but its warnings over fares come as the industry braces for a difficult winter season. Carriers are expected to make capacity cuts to save money, which some executives have warned could be brutal. Earlier in the summer, British Airways owner IAG killed off plans to grow capacity during the year in the face of persistently higher oil prices.

Ryanair said it was well placed to record another profitable year, albeit below 2026's record earnings. Its shares fell 2.8 per cent in early trading. The carrier is on track to increase summer season traffic from 138 million to 145 million, up more than 5 per cent.

Separately, rival Wizz Air said passenger growth during August was slower than in July, with traveller numbers rising 25 per cent to 8.7 million in August compared with July's 30 per cent growth rate.