DUBLIN, IRELAND — Ryanair, the Irish budget airline, saw substantial financial gains from its strategy to guard against oil price instability when Russia's invasion of Ukraine caused energy markets to become chaotic.

The airline managed to lock in a significant portion of its jet fuel costs at approximately $64 per barrel during the fiscal year that concluded on March 31. This strategy, known as hedging, resulted in savings exceeding €1.4 billion ($1.5 billion), as reported by the company on Monday.

Several airlines employ hedging strategies to mitigate their vulnerability to changes in jet fuel prices, which skyrocketed last year in the aftermath of the conflict's outbreak in Ukraine. Striking the right balance can be challenging, but Ryanair successfully capitalized on this, having hedged a large portion before Russia's invasion even started.

"We have a robust hedge on fuel," Chief Executive Officer Michael O'Leary commented on a conference call in May of the previous year. "I would attribute that more to fortunate happenstance rather than exceptionally savvy management."

This statement came just prior to the month-ahead jet fuel price for northwest Europe soaring to the equivalent of about $185 per barrel, as per fair value data gathered by Bloomberg.

Ryanair forecasts its fuel expenses to rise by €1 billion in the current fiscal year, which concludes in March 2024, stating that increased revenue will offset this surge. The company is almost 85% hedged, as announced on Monday. It also has a 25% hedge for the first half of the subsequent financial year.

That's "securing savings," Chief Financial Officer Neil Sorahan stated on an earnings call Monday. "We're hedging at $77 per barrel as opposed to $89 for the current financial year."

The jet fuel price in northwest Europe has sharply decreased since peaking last June and is currently around $92 per barrel.