Ryanair is preparing for an “Armageddon situation” amid the jet fuel crisis, the low-cost carrier’s chief financial officer told CNBC on Monday.
Neil Sorahan said in an interview with CNBC’s Ritika Gupta: “Are there plans for some kind of Armageddon situation? Of course there are, but I don’t think that’s going to happen. As it stands, we’re running a full schedule this summer, and we’re planning on running a full schedule through the winter.”
“I think some of the weaker aircraft carriers that were already struggling before the war could hit a wall in the winter,” Sorahan said.
Shares fell 2.7% in early trading Monday after the company announced full-year results. The stock price has fallen 27.5% since the beginning of the year.
The company is hedging 80% of its summer fuel at $668 a tonne, citing “economic uncertainty” due to the Middle East conflict and the ongoing blockade of the Strait of Hormuz. 20% of unhedged fuels “spiked” due to price changes. Sorahan said the airline had “no plans to cancel flights.”
He told CNBC that he wouldn’t be surprised to see some European airlines “get into trouble” this winter. spirit airlines In the United States, the jet fuel crisis compounded long-standing problems such as high debt and soaring costs, leading to the airline’s bankruptcy.
“We’re obviously in a very volatile oil market right now. If you go back a few months, we probably would have had concerns about oil supply, but we’re becoming increasingly confident that we won’t have any problems with oil until this summer,” Sorahan said.
He explained that Ryanair is not “overly concerned” about its jet fuel supplies as Europe’s dependence on the Strait of Hormuz has decreased and suppliers now get oil from countries such as the US, Venezuela and Brazil.
“Having said that, I think prices will remain high for a long time. Ryanair is particularly well-positioned given our strong fuel hedges,” Sorahan said.
In a conversation with CNBC in April, Ryanair CEO Michael O’Leary predicted that other airlines would be pushed into “virtual bankruptcy” if jet fuel prices remained high.
“There will be failures,” O’Leary said. “If it stays at $150 a barrel through July, August and September, it will bankrupt European airlines and will probably be good for Ryanair’s business in the medium term.”
How was Ryanair’s profit?
Ryanair reported a 40% increase in after-tax profit to nearly 2.3 billion euros ($2.7 billion) for the year ending March, with passenger numbers up 4% to 208.4 million. Meanwhile, sales fell by 11% to 15.54 billion euros.
The company initially expected summer fares to rise slightly, but now expects them to be roughly flat, with the final outcome dependent on last-minute bookings during peak travel periods. Airlines said late bookings were on the rise and awareness was declining.
Ryanair had to lower prices in early summer to attract customers, but the airline’s second-quarter prices will be similar to last year, Citi analysts said in a note on Monday.
“While the company has indicated that travel demand for S26 (summer 2026) is ‘solid’, bookings are closer than usual and economic uncertainty related to fuel prices, inflation and fuel shortage concerns have eased pricing in recent weeks,” the analysts said.
Ryanair has no plans to include fuel surcharges, but Sorahan told CNBC: “We’re not promising that we won’t raise prices. Ryanair has a load-active-yield-passive strategy, which means we set prices to fill our planes, and consumers pretty much decide what those prices are.” He added that 700 million people book tickets on Ryanair each night.
Holidaymakers in Europe and the UK are expected to take a trip by train or take short-haul flights this summer amid continued uncertainty over the jet fuel crisis, with southern Europe expected to be a popular destination.
