[Aviation Weekly Report] AirAsia plans new Middle East base; Ryanair’s profits surge; a U.S.-registered MD-11 freighter crashes.

1. Recently, China Cargo Airlines’ CK251 all-cargo flight—operated by China Eastern Logistics—departed from Shanghai Pudong International Airport, transited via Riyadh King Khalid International Airport in Saudi Arabia, and proceeded to Budapest Ferenc Liszt International Airport in Hungary. The Shanghai–Riyadh–Budapest route marks China Eastern’s first fifth-freedom cargo service in the Middle East, establishing a new overseas trade and economic corridor linking China, the Middle East, and Europe. 2. AirAsia plans to establish a new Middle East base. Recently, AirAsia is negotiating an agreement with Bahrain to set up a Middle Eastern hub in this Gulf nation, aiming to enhance the airline’s international influence. According to its plan, AirAsia Group intends to expand its fleet to 600 aircraft over the next decade—up from its current fleet of over 250 planes. During this period, the airline also aims to increase its number of destinations from 143 to 175. 3. Ryanair’s profits surge. Driven by significantly higher fares, Ryanair (FR), Europe’s largest airline, saw its profits jump 40% for the April–September period. For the first half of its fiscal year, Ryanair’s revenue rose 13% year-on-year to €9.82 billion, while its pre-tax profit increased to €2.89 billion.

Oil price shockwaves sweep across the aviation industry! Europe’s largest low-cost carrier Ryanair warns: jet fuel prices could hit $140 per barrel this winter, prompting capacity cuts to safeguard profitability.

Energy shocks are rapidly transmitting from commodity markets into the real economy—and the aviation sector is among the first to feel the pressure. On Wednesday, Ryanair—the largest low-cost airline in Europe—announced it would cut winter capacity and warned that persistently high jet fuel prices would impose greater cost pressures on the European aviation industry, potentially triggering a ‘substantial increase’ in short-haul airfares across Europe next year. Ryanair stated that it has already hedged approximately 80% of its jet fuel requirements—a hedge ratio among the highest in the industry—but still faces unhedged exposure equivalent to jet fuel priced at $140 per barrel. Amid elevated fuel prices, the airline has opted to proactively reduce winter flights to lower fuel costs, expecting to save between €70 million and €100 million (approximately $81 million to $116 million). This decision signals something more noteworthy: when airlines have already locked in the majority of their fuel costs yet still need to curtail capacity to protect profits, energy price shocks have clearly moved beyond being merely a trading theme in commodity markets—and are now materially influencing corporate operational decisions. Moreover, the pressure facing the aviation industry extends beyond rising crude oil prices. Repeated tensions in the Strait of Hormuz are simultaneously pushing up prices for gasoline, diesel, jet fuel, and European natural gas—making it difficult for companies to alleviate cost pressures solely through declines in crude oil prices. Brent crude currently trades near $95 per barrel, up over 55% year-to-date. Soaring jet fuel costs—even high hedge ratios cannot fully insulate airlines Ryanair’s capacity reduction vividly illustrates how energy price increases transmit directly to airline profitability. The airline has hedged about 80% of its jet fuel demand, yet the remaining portion remains exposed to high fuel prices. Rather than maintaining full flight schedules amid soaring fuel costs, Ryanair chose to deliberately scale back capacity—thereby preserving cost efficiency and profit margins. Jeff Currie, Senior Advisor at Carlyle Group and renowned commodities analyst, previously cautioned that markets may be underestimating the stress confronting refined products markets. In an interview on August 18, he stressed that market attention should not focus solely on crude oil prices, because consumers actually use gasoline, diesel, and jet fuel—whose supply-demand fundamentals ‘look far worse’.

Ryanair Predicts Biggest Jump in Air Fares in History Next Year

Oct 20, 2026

Ryanair CEO forecasts historic airfare hikes of up to 20% next year due to soaring oil prices from the Middle East conflict, noting insufficient hedging against higher fuel costs.

bloomberg

Ryanair Predicts Biggest Jump in Air Fares in History Next Year

FAQ