The CEO of low-cost carrier Ryanair, Michael O’Leary, told CNBC in an interview that some European airlines could go bankrupt if jet fuel prices remain high throughout the Northern Hemisphere summer, as the aviation sector faces mounting cost pressures due to disruptions in the Strait of Hormuz area. The CEO noted that budget carrier Ryanair is relatively protected, having hedged 80 percent of its fuel requirements, but warned that competitors with weaker hedging positions could face “real financial difficulties.”
“In March, Jet A-1 fuel was around $80 a barrel. Now it is $150,” O’Leary said, adding that if prices remain at this level in July, August, and September, “European airlines will go bust.”
According to the International Air Transport Association’s (IATA) jet fuel price monitor, the average price for jet fuel rose to $179 per barrel for the week ending April 24.
The International Energy Agency (IEA) recently stated that Europe could face a jet fuel shortage within weeks, depending on its ability to replace lost supplies from the Middle East, which previously accounted for a significant share of the region’s net jet fuel imports.
