Ryanair CEO warns of potential airfare hikes if oil prices remain elevated

Ryanair's CEO warned Thursday that airfare prices may see "significant" hikes if oil prices remain elevated as the surging cost of jet fuel continues to squeeze the airline industry.

"We expect pricing to be very modestly down in the second quarter (from July to September), but the December and March quarters are entirely up in the air," Michael O'Leary told reporters ahead of the company's annual general meeting, according to comments reported by Reuters.

"If oil prices remain high into next year, I think there will be a significant uplift in airfares, and we would hope to avoid that," O'Leary added.

CNBC has contacted Ryanair for comment on the statements.

Oil prices edged higher Thursday as worries over escalating tensions in the Middle East and their impact on energy supplies kept Brent crude above $100 a barrel. U.S. West Texas Intermediate crude futures were up 1.4% to $97.4 per barrel.

The jump in oil prices has sent the cost of jet fuel — a crucial energy source for airlines — soaring. It was last at $171 per barrel for the week ending Sept. 4, up 90% from the prior year's average, according to the International Air Travel Association's Jet Fuel Price Monitor.

In April, O'Leary told CNBC that there would be some "failures" in weaker European airlines later in the year as the cost of jet fuel becomes harder to absorb.

The company said at the time that it had hedged 80% of its jet fuel for the summer period. For 2027, it is hedged at $67 per barrel, while for 2028 it has hedged only 15% of its needs at $85 per barrel.

The budget airline's first-quarter profit took a 34% hit due to delayed consumer bookings after the start of the U.S.-Iran war on Fe. 28.

O'Leary said at the time that first-quarter ticket prices were lowered as consumers became anxious to book amid the Middle East conflict.

In April, he said: "We can guarantee people there'll be no price increases, no fuel hedging, no fuel surge levy surcharges, regardless of what happens to summer supply," he added.