Ryanair CEO Says European Airlines Will Fail If Jet Fuel Prices Remain Sky-High This Summer

Ryanair CEO Michael O’Leary said European airlines will fail if the price of jet fuel remains at current levels.

Speaking to CNBC, O’Leary said his airline is protected because it had hedged 80% of its fuel but noted that others could face “real failures.”

“Pricing has mushroomed since March. Jet A-1 was about $80 a barrel in March. It’s now $150,” O’Leary said. “I think there will be failures,” O’Leary added. “If it continues at $150 a barrel into July, August, September, then you’ll see European airlines fail and that, in the medium term, would probably be good for Ryanair’s business.”

Oil prices keep rising as the Strait of Hormuz continues to be closed and talks between the U.S. and Iran remain deadlocked.

Elsewhere, low-fare airlines in the U.S. have banded together and asked the Trump administration for a $2.5 billion bailout because of the rising cost of jet fuel.

The Association of Value Airlines (AVA), a trade organization for value airlines, said that its members were working collaboratively and looking for help from the Trump administration. Last week, member air carriers, which include Spirit, Frontier, Avelo Air, Allegiant Air, and Sun Country, met with Transportation Secretary Sean Duffy.

AVA says that it has asked for the creation of a $2.5 billion liquidity pool to be used only to offset “incremental fuel costs, as a necessary and targeted measure to stabilize operations and keep airfares affordable.” The statement notes that, since February, jet fuel prices have risen nearly 100 percent.

In this context, the price of Brent crude topped $111 on Tuesday. The international benchmark rose up to 4% on Tuesday before pairing some gains. The West Texas Intermediate also climbed more than 3%, topping $100 per barrel.

Prices continue to climb this week, particularly as the Trump administration appeared to convey the Trump administration’s rejection of Iran’s proposal to end the war and reopen the Strait of Hormuz without a nuclear deal.

Speaking with Fox News, Rubio said that the “nuclear question is the reason why we’re in this in the first place.” He went on to say that any agreement would need to be one that “definitively prevents them from sprinting toward a nuclear weapon at any point.”