European airlines will fail if jet fuel prices don’t fall

Budget airline’s CEO says European airlines will fail if jet fuel price stays high through summer ryanair he warned.

Speaking to CNBC on Thursday, CEO Michael O’Leary said the airline is protected because it hedges 80% of its fuel, but he predicts “real failures” for other airlines unless the price of jet fuel drops.

The price has increased since the blockade of the critical Strait of Hormuz following the outbreak of war in the Middle East on February 28.

“Prices have increased rapidly since March. Jet A-1 was about $80 a barrel in March. It’s now $150,” O’Leary told CNBC’s Ben Boulos at the Norges Bank Investment Management Conference in Oslo. he said.

“If prices remain high for longer this summer, we think some of our European airline competitors will face real financial difficulties,” he said.

“I think there will be failures,” O’Leary added. “If it continues at $150 a barrel in July, August and September then you will see European airlines fail and that will probably be good for Ryanair’s business in the medium term.”

He added: “We are the best insulated, most protected airline in Europe.”

O’Leary continued: “Whatever happens to summer supply, we can assure people that there will be no price increases, no fuel protection, no increase in fuel duty.”

“We were very concerned about supply in the UK about two or three weeks ago, but it seems to have improved.”