Soaring oil prices are driving up jet fuel costs. And Ryanair though isn't worried. The CEO says they've hedged for the year. But one of the things Ryanair and all the CEOs are worried about is competitiveness of European aviation. Michael claims the block is shooting itself in both feet with two new rules. First, it's called European Trading Scheme or system, the ETS, the emissions trading system. It's all about capping greenhouse gas emissions. But here's the problem. European airlines when flying intra-Europe pay ETSs. So if you're going from Belgium to Tenerife, you will pay, I don't know, I think the number that they all talk about, it's roughly a family of four, you will pay an extra $140 charge. However, if you decide to go next door and go from Belgium to Morocco, you pay zero. Why? Because it's not intra-Europe and as a result countries like Spain are furious that this rule is doing it. It's even worse of course if you're looking to go long-haul, similar sort of things because of ETSs and the EU SAF mandate, they must use a certain amount of sustainable aviation fuel. Let's take the example, our old friend from Nice via Paris or Frankfurt to Tokyo. If you're flying somewhere, then you pay the ETS scheme here and the SAF mandate. However, should you decide to go via the Gulf if you could or via Istanbul, you pay nothing. Once again, the regulations they say simply disadvantage European carriers. It is a classic case of Europe killing its own industry. Michael O'Leary told me Ryanair was well prepared for the fuel costs, but this is something different.
We're very well hedged. We're 80% hedged at $67 a barrel out to March of 2027. So, we bought forward the fuel. As long as the war in Iran finishes in the next month or two, we think fuel prices will fall back sharply. But if the longer it goes on, the greater risk there is to pricing in summer '27.
Do you have to start making decisions about your next hedge yet?
Not yet. I mean, because we're so well hedged, because we are forward bought out to March '27, really, we're looking at kind of summer of '27 and that's too far away to be.
Was that hedge good luck or good management?
Oh, good luck. We have no good management in Ryanair. We're Irish.
The way in which you're pulling out of various markets now when you're not happy with airport charges, when you're not happy with ATC, government taxes, but you're doing it more and more, particularly this year, this last few, this next season, you've really made a very big statement.
I think what's happening Richard across Europe is you have so many governments abolishing taxes, Sweden abolishing aviation taxes, the Slovakians, the Albanians, regional Italy, and we want to reward those countries that are abolishing stupid taxes on aviation by giving them more growth. And to do that, we have to take aircraft away from countries like Germany, Holland, regional Spain where they're raising taxes and shooting themselves not in one but in both feet.
Where does that end in a sense? Because if we take the UK which has got very high taxes in many cases, but you're not pulling back dramatically.
No, not in the UK at the moment.
I mean, of course, it's opportunistic, but I mean, it's opportunistic because you want to reward those countries abolishing taxes. To me, it's remarkable that Sweden, the home of Greta Thunberg and people who should have spent more time in school learning about the environment and striking, is abolishing aviation taxes. Five years ago, we were sitting, they were talking about flight shaming. Now, they're abolishing taxes because they realize they want to grow and the only way to grow is lower access costs. When you look at what's happening here in Brussels, I know we will not be able to broadcast some of the language that you would want to use. I'm aware of that. But the lack of progress here on things like single European skies, SAF mandates that just simply will not work. What is the answer for the industry?
I think there's a fundamental change taking place at the moment. There's a real push from the governments, particularly like governments in Sweden, governments in Italy now calling for the abolition of ETSs. I mean, ETSs is this taxation on only intra-EU flights which makes it massively subsidize non-EU travel while the Europeans pay for it all. And we need a level playing field in environmental taxes. We need to bring ETSs in line with CORSIA which is what the non-Europeans pay. But I think...
But why won't they do it? This argument has been around as long as you and I have.
It has, but for the last, I think, 5, 10 years the Greens have been in power in Europe. The Greens have been driving the agenda. Now they've lost most of their seats in European governments, in the European Parliament. Europe is now much more focused on competitiveness. They've suddenly realized that Putin is in Ukraine, Trump is in the White House and Europe better get its act together. And for the first time I think in about 10 years we have a real shot at making air travel in Europe more competitive by abolishing these stupid taxes.
Okay. So what has to happen? You say, and we're very keen on Quest's business with competitiveness. The Draghi report, the whole...
