Economy airline Ryanair has warned that it may have to raise fares by 5% this year to cover the cost of fuel. The company has suggested that it will do no more than break even this year if fuel remains around $130 per barrel.
Ryanair have been bullish in recent weeks claiming that many of it’s rivals may soon go bust, only last week Cheif Executive Michael O’Leary said “People are getting more price sensitive, they are trading down and flying with us at a time when business only airlines are going bust.” This came after SilverJet went into administration on Friday.
O’Leary says that based on forward bookings, assuming that oil averages out at $130 a barrel and an increase of 5% on fares, Ryanair would just about break-even for the coming year.
The international Air Transport Association have warned that the record oil prices will cost the industry $6.1bn this year, and have called on the government to cut aviation taxes.
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