Ryanair CEO Michael O’Leary warns that some of Europe’s airlines will go out of business if jet fuel prices remain elevated.
“If pricing stays higher for longer this summer, we think a number of our airline competitors in Europe are going to face real financial difficulties,” O’Leary said on Tuesday, speaking to CNBC at a conference in Oslo. “Pricing has mushroomed since March. Jet A-1 was about $80 a barrel in March. It’s now $150.”
Jet fuel prices in Europe have more than doubled since the U.S. and Israel launched attacks against Iran on Feb. 28. Tehran responded by closing the Strait of Hormuz, through which around a fifth of the world’s oil normally travels.
Airlines are already feeling the squeeze. Lufthansa said last Tuesday it would cut 20,000 short-haul flights through October to save “40,000 metric tons of fuel,” while SAS Scandinavian Airlines has canceled around 1,000 flights in recent days and Air France-KLM has imposed a €100 surcharge on long-haul tickets.
