European airlines will fail if jet fuel costs stay high, Ryanair CEO says
Posted by ABoutDeSouffle@reddit | aviation | View on Reddit | 88 comments
Posted by ABoutDeSouffle@reddit | aviation | View on Reddit | 88 comments
ImissTBBT@reddit
Before posting "serves them right" think about it.
Do you want a holiday somewhere hot that doesn't cost you the earth? If so, hope that the airlines can weather the high prices.
Less competition = higher prices
SillyDeersFloppyEars@reddit
People always bitch about Ryanair, but they're quick to lap up the £50 return tickets from London to Ibiza.
Obviously they price gouge on the upsells to make profit, but for the average tourist they make travel affordable and accessible like few other airlines do.
Sensitive_snausage@reddit
Ryanair gets a lot of flak but you get exactly what you pay for with them. It’s better to pay Ryanair prices and get a Ryanair experience then pay London airways prices and get a Ryanair experience plus a terminal swap at Heathrow.
Heavy_Team7922@reddit
London Airways?
Sensitive_snausage@reddit
British airways, but all of its operations are so London focused people call it London airways.
KLM has more British destinations than British airways
gazchap@reddit
I mean, to be fair, Britain is small enough that it's generally not that much quicker to fly domestically than it is to just drive or go on the train. Especially if you don't already live in a location with an airport on your doorstep.
It would be nice if BA operated international flights out of places other than London airports though, I agree there.
throwawayaccyaboi223@reddit
It is generally cheaper to fly across the UK than it is to take the train though... Which is insane.
QuevedoDeMalVino@reddit
Yep. I am sick of premium prices for shitty flying. If I am paying a good old big carrier fare, the experience should have nothing to do with Ryanair. And sadly, I don’t think that is how things are.
I feel Ryanaired by the big carriers, at big carriers fares.
Sensitive_snausage@reddit
I think it depends which ones, Air France is really the only one left in Europe in my mind.
I flew from Paris to Dublin with them and they gave me a sandwich and a glass of wine as part of a standard economy ticket.
Lufthansa group has been slipping really badly recently, there is very little different between the product on the flag carriers and discover or euro wings. Austrian has especially declined, they used to have a really good product but now it has conformed to the rest of the group.
London airways is just awful all around and I despise Heathrow with a passion.
Nachtzug79@reddit
Take away wine from Air France and you take away its French soul.
SillyDeersFloppyEars@reddit
I don't know if they've changed recently, but KLM have always been fantastic for me. Especially long-haul.
SAS was great with complimentary drinks and snacks even on a 45 minute domestic flight in Norway, but that was getting on for a decade ago now.
fuggerdug@reddit
I flew BA Heathrow to Denmark recently and got a "free" water and a biscuit. I honestly felt treated. The seats were much comfier than Ryanair too. It was probably 100 pounds more tha the Ryanair equivalent flight though, so...
kobrons@reddit
Ryanair gets a lot of flag for how they achieve the prices and because their ceo is pretty controversial.
ThrowAwaAlpaca@reddit
Ppl who bitch about Ryanair probly never took it and are stupid. Most ppl have no problem flying the safest airline in the world for the cheapest fare on the market. And I'm not a fan and avoid them as much as possible.
SqueekyBK@reddit
Part of the issue in the future could be that if they’re one of the only shows in town it’s bad for us all. They’re a race to the bottom type of service.
BigHowski@reddit
Although to be fair I'd like a decent experience and I'd not mind paying a bit extra
yabucek@reddit
I'll defend Ryanair every time some schmuck on reddit talks shit about them.
Do I like being asked seven times to pick my seat for a fee? No.
Is it silly that they sell lotto tickets onboard? Absolutely.
Do they get me to a cool destination for a fantastic weekend getaway at the price of a cinema night? You fucking betcha.
They sell and deliver the exact service they advertise. That's all I've ever wanted from any company ever, I don't need white glove service on a 2h flight and I don't want to pay for it.
sarahlizzy@reddit
The upsells are not even that expensive. I’m flying STN FAO next week with them in 2F on a 737-8200, which is a front row window seat. I know what I’m going to eat on board. The entire thing will cost me about 50 euros.
febrileairplane@reddit
We will see a live demonstration here in the US once Spirit shuts down.
Very likely a couple other airlines like Breeze and Avelo shutdown or get seriously kneecapped in their growth.
Then the legacies maintain their hiked fares as fuel prices come down, in an industry more concentrated than at the beginning of the fuel crisis.
s0ngsforthedeaf@reddit
Flights are too cheap. They encourage a lot of environmentally unfriendly flying.
I got return flights to Spain from the UK for £65 (first flight in nearly a decade). Its become normal, but if you think about what's involved, it's a ridiculous price.
isaacladboy@reddit
65? For Ryanair? Yeesh.
I paid about 40 return to palma airport last month. About the same to fly to France next month.
s0ngsforthedeaf@reddit
You shouldn't do it. But then, so shouldn't a lot of people.
isaacladboy@reddit
What fly Ryanair? Why not, it’s cheap and cheerful
s0ngsforthedeaf@reddit
Fly loads, I mean.
Tall_Fox@reddit
No ethical consumption under capitalism, unfortunately. Should just be regulated at the government level
lilion12@reddit
Unpopular opinon but yeah.
Martin8412@reddit
Are they too cheap or are the alternatives just too expensive? Ryanair makes loads of money, so it’s not like they’re dumping prices to capture market share. Their fleet is among the newest, so also the most efficient.
I know they don’t pay fuel taxes, but even if they did, it wouldn’t change the price much.
CashKeyboard@reddit
Their point is not an economical one but rather this: Flights are causing externalities which will be paid eventually, just not by Ryanair and just not right now. Would the prices be calculated to include these externalities, flying would be much more expensive, just like other modalities already are to an extent.
Martin8412@reddit
People keep saying that, but that doesn’t make it true. I’m not saying that flying doesn’t emit CO2 or other gases. But in the whole grand scheme of things, flying is such a minuscule thing. As I recall it accounts for around 3% of emissions.
People commuting in their car alone to and from the office every single day is a much bigger issue.
CashKeyboard@reddit
CO2 is only one such externality. Reducing it to that single emittance which seems miniscule gives great peace of mind but doesn't really reflect the real consequences. There's NOx (generating O3), sulfates, contrails from water vapour and soot in material emissions. There's the effects of noise on humans and wildlife. There's ground sealing and destruction of habitats from airports and airport-related infrastructure. There's emissions from ground handling vehicles, emissions from individual transport to and from airports. There's the various effects of oil extraction and refinery which again start at emissions but also go into habitat destruction and negative health effects on humans who are either working or living in proximity to those.
We are currently very bad at calculating and thus factoring these externalities into our economic realities. That is because it's a) complex and b) it wouldn't really do our current ways of doing things a favor.
I am not expecting you to do the calculations but I am kind of expecting you to realize the burden that our actions are imposing on the planet and that picking one particular emittance of thousands to miniscule that burden isn't really helpful.
LetMeBuildYourSquad@reddit
Not really, emissions per passenger kilometre for flying on a LCC like Ryanair are lower than driving
s0ngsforthedeaf@reddit
...and you would take these 500/1000+km journeys if you could only go by car/train?
LetMeBuildYourSquad@reddit
Not as many of them, no.
But I really don't think aviation is all that bad. It's less than 1% of global emissions and there is a clear pathway to decarbonising the sector through more efficient aircraft, SAF, carbon removals, and airspace modernisation. Most European airlines are now on this pathway.
The benefits of travel are absolutely enormous. Even through an environmental lens, it distributes wealth and income away from the highest emitting countries and into those that historically have lower emissions per capita. For me personally, travel has been absolutely critical to my decision to work in sustainability - I don't think I'd have anywhere near the same level of desire to protect the planet if I hadn't seen so much of the world.
The ability to travel is one of humanity's greatest achievements. Aviation will decarbonise but the answer isn't through restricting people's ability to travel
MiniBrownie@reddit
I think it's a bit unfair to single out ULCCs for environmentally unfriendly flying, when these airlines have the lowest CO2e emissions per passenger kilometre.
All flying is environmentally unfriendly, but if you have to fly somewhere, choosing ULCCs will generally result in the lowest environmental impact. It definitely won't be a great experience squeezing into a plane with 200 other people carryonmaxxing on the tarmac of Charleroi, but the squeezing is partially what makes these flights have the lowest emissions per passenger kilometre.
MiniBrownie@reddit
And here are the Western EU intra-regional rankings:
And Cirium's explanations
Prior_Worldliness287@reddit
X that £65 by 180. You're looking at £11,000. However your seats would have been some of the cheapest. Throw in say 25% selling for double that and another 25% selling for 2.5x that your up to say £20,000. Then most low costs make more money on ancillaries than seat sales. Speedy boarding, bags, seat selection and food on board. So let's conservatively double that number. £40k. So 20k each way as wha I guess would be the minimum revenue.
Crew costs for the day - £2k Fuel costs for a 2.5hr flight - £7k at £1000 a ton. Airport and airways charges - £5k Aircraft devaluation or lease charges - £? Maintenance- £1k Airline ops costs - £1k
So £15k ish + devaluation / lease charges. That's say 2-5k profit a flight. A low cost operator running 1200 flights a day £6mill profit before tax a day through high season with high load factors.
Your seats were cheap to make sure they're running at high load factors to cover winter slumps.
Flights are not too cheap profit wise. Most low costs only make profit at 85%+ load factor.
NewUser769283@reddit
You're not their usual customer.
Their usual customer pay fees for a lot of extras.
s0ngsforthedeaf@reddit
Dunno about that, people on economy flights try dodging the fees.
Yeah its more like £90 with luggage, but even that's not much.
fuggerdug@reddit
Plus a return that's at a more popular time and costs £190... In my experience you can still find cheap single fares if you're not fussy on date or time, but trying to match that to a cheap return is where the challange lies, again unless you are completely flexible on dates.
britishmetric144@reddit
Yeah, that's exactly why France banned short—haul flights if a train can do the job in less than 150 minutes.
Ruepic@reddit
People don’t understand how shitty the alternate can be. No one ever really thinks that far ahead.
_Pencilfish@reddit
A holiday somewhere hot is literally costing the earth. Prices going up are a good thing that more closely reflects the real costs of plane travel.
HJSDGCE@reddit
I don't do international holidays.
ABoutDeSouffle@reddit (OP)
Also for those like me who fly rarely but do not like ULCCs and instead are OK with spending a bit more: if traditional European airlines die, no replacements will be founded, especially no none outside the rock-bottom price segment.
Calm_Criticism9544@reddit
I'd like it if Ryanair failed actually, go ahead pal.
lll-devlin@reddit
Ok is an alternative view… “The sky is not falling” , airlines didn’t fail in the 70’s oil crisis. The world didn’t fall apart during that fuel crisis created by OPEC I might add…looks up whom is in opec.
Now, you can say companies (airlines) can’t make the same profits they were making…and therefore might have to close. But stop with the doomsday headlines, sensible people are getting tired of it…and then start to ignore you.
Also an interesting point, UAE is pulling out of OPEC…this time around.
jorgecardleitao@reddit
Note: jet fuel is already excepted from VAT and special taxes on oil derivatives...
So - fuck them - play on even field and pay taxes like every car owner and bus user.
ABoutDeSouffle@reddit (OP)
Let's see whether Ryanair has hedged their fuel needs, but I guess he's right and some of the weaker airlines will fold.
Martin8412@reddit
Does fuel hedging work in the case of force majeure like war in the Middle East?
Boeing367-80@reddit
You can only break the contracts if delivery of the product is impossible (as opposed to highly unprofitable).
cat_prophecy@reddit
If it was profitable at $50/bbl, it's even more profitable at $150/bbl.
Oil prices don't affect the cost of extraction.
devildog2067@reddit
If you’re paying $150/bbl and someone has contracted to buy it from you at $67/bbl it’s not at all profitable. That’s how hedging works.
ABoutDeSouffle@reddit (OP)
Good question. My knowledge is limited, but since it's purely a financial market instrument I would say yes. Counterparties would bleed, but that's the risk if you enter into options.
Whether the airlines will actually get the fuel is a different question, though.
CashKeyboard@reddit
Important to note: Fuel hedging, being a financial instrument, happens on paper and protects from financial effects of a volatile fuel market. It does not necessarily protect from the physical scarcity that may or may not happen.
pintord@reddit
Right, if they can't find fuel or the insurance declares force majeure, they will also be in trouble.
Insaneclown271@reddit
It also doesn’t cover the cost of refining the oil. The hedging is usually on crude oil.
Giac@reddit
They hedged for 60$ a barrel until March 2027.
felloutoftherack@reddit
They have hedged. Figures can be found slide 13 in their latest annual results presentation.
https://investor.ryanair.com/wp-content/uploads/2025/05/FY25-Ryanair-Presentation.pdf
Boeing367-80@reddit
https://investor.ryanair.com/wp-content/uploads/2026/01/Q3-FY26-Ryanair-Presentation.pdf
Page 8 of the above says that Ryanair was 80% hedged for FY27 (year ending March 2027) at an equivalent of $67 per barrel. That's less than half of spot right now.
SubjectiveAssertive@reddit
He mentioned on an interview somewhere they are hedged until March next year
someonehasmygamertag@reddit
I’ve seen a few interviews with him and my understanding is RyanAir are always hedging fuel. To what extent and what prices they can tolerate, I’m not sure. It may be in their public financials but I don’t read those. I imagine from his comments that they can survive the summer.
Ok_Excitement725@reddit
More than just European. Foreign airlines won’t be able to afford to or even get fuel in Europe and cease flights there. The supply shock hasn’t even hit yet. The last barrels of ME oil is only just being offloaded ships as we speak. Once it hits it’s gonna hit hard. People are forgetting this
asfsdgwe35r3asfdas23@reddit
People have been saying this for the last 2 months. No, nothing is “hitting hard” there is enough local refinery capacity in the EU. There are some issues with specific countries, that don’t have this capacity, and the EU is working on a plan to share fuel across countries so these countries can continue to operate normally. But there is no risk of shortages.
asfsdgwe35r3asfdas23@reddit
Ryanair is always complaining about everything. Taxes, fees, governments not given them enough money so they will close X route… of corse they are now composing and asking for government money again, that is the whole businesses model. That doesn’t mean that there is a real issue at all.
chotchss@reddit
Most of these airlines are surviving because fuel prices are subsidized. And given the impact of climate change, maybe we should be spending that money on rail infrastructure and public transport instead of using planes for short hops.
InspectionSouthern11@reddit
You got places like here in Canada where aside from Ontario and Quebec, we basically have no reliable, affordable terrestrial transport. Rental cars, stinky coaches or VIA operating on freight rail lines is what you got.
VIA ticket from Halifax to Regina is like 650 bucks, I can get a flight with any of the airlines for less than 300ish easy and be there in half the time or less.
They don't want to invest in it (especially the infrastructure) at all in alot of places, especially here. Which is unfortunate, I love flying but man, options are nice too.
MBkufel@reddit
Yeah they don't pay taxes on fuel for some reason
pholling@reddit
It’s because of the Chicago convention (a treaty), everyone agree not to tax international fuel. Domestic flights are fair game. There are also all sorts of other ways to charge airlines, including nav service charges and landing fees, all of which can have environmental components.
ThrowAwaAlpaca@reddit
Oh fuck off Mr i made 2.5b last year. Why dont you go open the strait yourself, what a dumb greedy pig.
Prior_Worldliness287@reddit
Very typical O Leary.
European airlines have been in line for consolidation for a long time.
It's unlikely airlines will disappear. Some less profitable routes will be removed or shifted.
History has shown after covering the mortgage, holidays are some of the last spends to disappear. Stable low cost airlines typically benefit from recessionary environments as people shift to cheaper holidays.
I can see EasyJet being a take over target atm with their share price below net asset value, strong market positioning. But the wouldn't be asset stripped, their fundamentals are strong, they'd be rebranded or maybe not even that just run under different ownership as the lease the brand anyway.
Wizz has huge financial backing so can fail for a long time before they disappear. Even then again I'd guess largely a re branding maybe with some route and operation stripping.
Jet2 seem to be solid, strong fundamentals, a USP of a product in the UK market and not too big to not be able to consolidate and weather the storm for a while without buckling.
TUi UK maybe one to watch slowly disappear. They've been quiet for a while. Their customer base is aging and disappearing. Their competition is strong and they haven't really reacted. But TUi is huge and will remain in Europe.
Virgin is an intrwsting one. With Deltas legacy fleet replacement they're using the newer jets on the pacific routes. Their older fleet is much more expensive than VS to run on the Atlantic routes. They brought VS for the LHR slots. The VS Brand is tired and lost its pzazzz but delta doesn't really have a UK brand that's better. So I imagine they'll slog on and make it through.
IAG (they may ditch euro flyer), RYR are not going anywhere. They'll weather the storm for a long time. Maybe scale back operations for a while.
As for other European carriers they are few that are not already consolidated into larger alliances.
Perhaps the likes of Norse, SAS, EuroFlyer may cease but likley just start up with another name same management etc once things have eased off after debt write offs.
ILikeFlyingMachines@reddit
Ryanair likes to shit on politicians/regulations in general so I wouldn't listen to them too much
soundguyjon@reddit
It is possible to separate Michael O Leary the PR man who says anything to stay in the news as free press for his company, and Michael O Leary the successful businessman who pioneered the ultra low cost business model with an airline that continues to dominate the aviation industry. If there’s anyone that knows this stuff, it’s him.
_Yellow_13@reddit
He’s not some unicorn In his own words. He copied southwest, then exploited labor laws here and took it to an extreme.
52-61-64-75@reddit
Can you elaborate on the exploitation of labour laws part?
_Yellow_13@reddit
Ur kidding right? 20 seconds on google and you’ll see what they forced ‘staff’ to do. Setting up private limited companies contracted to 3rd party firms. Go down true rabbit hole and it gets worse.
No sick pay. Pay ur own social insurances etc.
We never had this in America due strong unions. Horrible shit in Europe.
I’ll attach you a link anyway https://www.theguardian.com/business/2017/oct/03/ryanair-pilots-hmrc-investigation-airlines-uk
ILikeFlyingMachines@reddit
Also in Europe it only works because these subcontractors are legally registered in countries with bad labour laws (e.g. Malta).
In Germany or France this would NEVER work
_Yellow_13@reddit
Im not following if ur a Ryanair pilot in Germany your gonna be okay.
ILikeFlyingMachines@reddit
Ryanair does not employ any pilots in Germany for that reason
_Yellow_13@reddit
I guess ur German. But didn’t Ryanair just close a base in Berlin down? Why did German pilots take Ryanair to court?
https://www.aerotelegraph.com/airlines/german-pilots-want-to-take-ryanair-to-court/gnp9bx1
https://www.rte.ie/news/2017/1229/930065-ryanair-pilots-social-security/
fuggerdug@reddit
First and foremost he wants a headline. This is a typical example of that.
Popular-Rock6853@reddit
But he didn't shit on anyone. Did you read the article? What he said makes a lot of sense.
Baraka_1503@reddit
I actually listen to what he says for exactly the same reason. No one knows margins and markets better than RyanAir.
BlaxeTe@reddit
That would suit him very well. He’d gurgle up those pilots in a strained industry as well as landing rights and routes. He’s always been smart and calculated about his decisions when crisis came.
MikhailCompo@reddit
Fuck you O'Leary, you whiney bitch.
Inondator@reddit
Actual jet fuel cost increase is around 15€/pax/1000 km. If airlines and passengers can't manage that, there are serious questions to ask...
BennyboyzNZ@reddit
i mean that’s about how much a flight for ryanair cost
Inondator@reddit
At that price, they aren't profitable, because it's the cost of jet fuel alone before the Ormuz crisis.
Most Ryanair tickets are much more expensive than that.
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