Jet Fuel Crisis: European Airlines Prepare for Worst-Case Scenarios

LONDON — The Irish low-cost carrier Ryanair has prepared emergency scenarios to face the jet fuel crisis. Ryanair’s Chief Financial Officer (Cisco), Neil Sorahan, stated that the low-cost airline has plans in place to manage the worst-case possibilities within the aviation industry. “Do we have a plan for such a worst-case situation? Of course, we do. However, I do not see that scenario actually materialising,” Sorahan said, as reported by CNBC on Monday. He added that the airline is currently maintaining its full summer flight schedule and plans to continue operations through the winter. He noted that some airlines that were already struggling might potentially collapse by the winter season. Ryanair’s shares fell 2.7 per cent during Monday’s trading following the release of the company’s annual performance report. Throughout the current year, the airline’s shares have weakened by approximately 27.5 per cent. Ryanair revealed that it has hedged 80 per cent of its summer fuel requirements at a price of 668 US dollars per metric ton. This move was made amidst economic uncertainty caused by conflicts in the Middle East and the blockade of the Strait of Hormuz. Meanwhile, the remaining 20 per cent of unhedged fuel requirements have experienced price surges due to energy market volatility. Nevertheless, Sorahan emphasised that Ryanair has no plans to cancel flights. He suggested that several European airlines could face financial difficulties similar to those experienced by Spirit Airlines in the US, which collapsed after the jet fuel crisis exacerbated long-standing issues such as high debt and surging operational costs. “We are in a very volatile oil market. A few months ago, there were concerns regarding oil supply, but we are now increasingly confident that the supply for this summer will not become a major problem,” he said.