Ryanair is 'insulated' after Saudi oil attacks
Ryanair is among the European airlines most insulated from a potential short-term spike in oil prices following Saturday's refinery attacks in Saudi Arabia.
Ryanair has 90pc of its 2020 financial year (which ends next March) fuel requirements hedged at an average price of $709 (€635) per metric tonne. For the 2021 financial year, it has 37pc of its jet fuel requirements hedged at an average price of $632 per tonne.
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The airline is among the European carriers with most fuel hedged, where they buy their future fuel requirements at a set price.
For its financial year ending this month, Easyjet had 72pc of its fuel hedged at an average of $584 per metric tonne, as of last May. As of the end of June, Wizz Air had 66pc of its fuel requirements for the nine months to the end of December hedged.
The jet fuel price per tonne in Europe was $617 last week, according to the International Air Transport Association.
The oil market will rally by $5-10 per barrel when it opens this morning and may spike to as high as $100 per barrel if Saudi Arabia fails to quickly resume oil supply lost after attacks over the weekend, traders and analysts said. Brent oil was trading at $60.22 a barrel before the attacks.
Attacks on two plants in the kingdom on Saturday knocked out more than half of Saudi crude output, or 5pc of global supply. "The scale of (the) attack will encourage markets to re-examine the need for considering an oil geopolitical risk premium," said Ayham Kamel, the head of Middle East research at political risk analysis firm Eurasia Group. (Additional reporting: Reuters)