On Monday, the Chief Financial Officer of Ryanair, headquartered in Ireland, told CNBC that the airline has prepared for a “doomsday-like” scenario due to the aviation fuel crisis. However, many companies may not survive this fuel crisis.
Chief Financial Officer of Ryanair, Neil Sorahan, speaking to CNBC’s Ritika Gupta, stated, “Do we have a plan for ‘doomsday’? The answer is yes.”
He continued, “However, I do not think such a scenario will occur. As of now, we plan to operate fully throughout the summer as scheduled, and also intend to maintain full operations during the winter with no plans to cancel flights.”
But Sorahan warned, “By winter, we might see some weaker airlines go completely bankrupt, as they have been struggling even before the conflict in the Middle East.”
Due to the ongoing economic uncertainty caused by the conflict in the Middle East and the continued blockade of the Hormuz Strait, Ryanair has hedged 80% of its summer fuel at a locked price of $668 per ton, while the remaining 20% of unhedged fuel has seen prices “soaring” due to market fluctuations.
Sorahan pointed out, “We are currently facing a very volatile oil market. A few months ago, we might have had some concerns about oil supply, but now we are increasingly confident that there will be no issues with oil supply this summer.”
He explained that Ryanair is not overly worried about aviation fuel supply, as Europe’s reliance on the Hormuz Strait is decreasing, and suppliers can now obtain oil from countries like the United States, Venezuela, and Brazil. “Nevertheless, I believe prices will remain high in the long term. However, given our strong fuel hedging capabilities, Ryanair is in a particularly advantageous position.”
Sorahan also mentioned that some European airlines may “run into trouble” during winter, following in the footsteps of Spirit Airlines in the United States. He explained that the fuel crisis in the U.S. exacerbated longstanding heavy debts and rising costs for Spirit Airlines, ultimately leading to its closure.
Ryanair CEO Michael O’Leary, interviewed by CNBC in April, also predicted that if aviation fuel prices continue to rise, many airlines will face “real failures.”
O’Leary said, “If oil prices reach around $150 per barrel, European airlines will go bankrupt in the summer (July to September). In the medium to long term, this may benefit Ryanair’s business.”
In terms of financial results, Ryanair announced that for the fiscal year ending in March, net profit increased by 40% to approximately 2.3 billion euros (about 2.7 billion U.S. dollars), passenger traffic increased by 4% to 208.4 million, revenue was 15.54 billion euros, an 11% year-on-year increase, but this still led to a downturn in its stock price.
Although Ryanair initially expected a slight increase in summer ticket prices, current predictions indicate prices will remain stable, with the final outcome depending on booking conditions during peak travel periods. The airline noted that passengers are increasingly booking flights closer to departure dates, which reduces price predictability.
On Monday, Citigroup analysts stated in a report that Ryanair will have to lower ticket prices in early summer to attract more customers but estimated that the company’s ticket prices for the second quarter will be similar to the same period last year.
The analysts noted that the company believes there is “strong” travel demand for the summer of 2026, but economic uncertainty resulting from fuel prices, inflation, and shortages has led to customers booking later than before, causing ticket prices to drop in recent weeks.
Furthermore, holidaymakers in Europe and the UK are still dealing with the ongoing uncertainty caused by the aviation fuel crisis. Many are planning to travel by train or opting for shorter flights this summer, making Southern Europe the preferred destination.
Currently, Ryanair does not have plans to add fuel surcharges, but Sorahan told CNBC, “We have not promised not to raise prices. Ryanair adopts a strategy of ‘seat proactive, revenue passive,’ meaning we price based on the aircraft load factor, and ultimately, prices are largely determined by consumers.”
He added that there are up to hundreds of millions of bookings or searches for Ryanair flights daily.