Ryanair Group CEO Michael O’Leary on jet fuel crisis: Expect airline bankruptcies in Europe

Added: 2026-05-18

[00:00:00]Europe's largest airline group, Ryionaire, uh, earnings out this morning. Joining us now to talk the company's results, fuel costs, Boeing, and more is Ryan Air Group CEO, Michael Olirri, the Dublin based budget airline group, is Boeing's biggest customer outside of the US.

[00:00:18]>> Good morning.

[00:00:19]>> Good morning, Joe. I don't I don't feel qualified to fill Becky's seat here, but I'll do my best.

[00:00:23]>> You do just just do your best.

[00:00:24]>> Considerably older and a lot less attractive. Certainly not uh as as uh well actually we can't say things like that anymore. You look great. You look great. I find you very attractive. Um how bad is is this in likely to get in terms of of jet fuel?

[00:00:39]>> I don't think it's bad at all. I mean, you know, we've just announced record full year results. So, we carry 28 million pastures. We were declared a profit at 2.26 billion. Oil prices have spiked hugely. Uh but we're very well hedged. We're 80% hedged out to March 27 at $67 a barrel. The spot price today is on Jet is about $150 a barrel. So, we're in great shape.

[00:01:00]>> Let's have a good CEO. Whose idea was that? The CEO or the CFO?

[00:01:04]>> Probably.

[00:01:05]>> You've been hedging all along.

[00:01:06]>> Yeah, we hedge all along. Generally speaking, it's the advantage of having a strong balance sheet. So, we're in pretty good shape. Our competitors are in real trouble. Most of them only hedge till the end of September. Um the risk in Europe though is they were worried in the last couple of months there'd be supply disruptions. So, they get some of their oil from the Middle East. Most of that has switched to supplies coming from the Americas, Norway, West Africa.

[00:01:26]So the risk of fuel disruption has gone away, but much higher oil prices are going to be a real challenge through the remainder of this summer in Europe, but thankfully Ryan Air because of our hedging, we should be in pretty good shape.

[00:01:36]>> Is your sense that the other airlines that you you worry about could get in trouble that they do want do they either go bankrupt or are you worried that they just start canceling flights left and right because it's too expensive to even be in the air or what? Andrew, well, they're already cancing flights and we've seen a lot of competitors take five, six% of capacity out in April, May, and June. I mean, I think if oil prices remain up at these levels, if the straightforward remains closed until, say, September, October, there's going to be airline bankruptcies in Europe like you had um Spirit over here in the States. We have airlines over there that are in the same kind of poor shape. They have low fairs but high costs and therefore can't make money. I mean, I don't think anybody really believes this is going to continue on to the end of the summer. You have Memorial Day coming up here at the end of May. the midterms are kicking off. I, you know, I think the administration is going to have to declare a win and get the hell out of there.

[00:02:23]>> Policy mistakes just across the European Union with with energy. I mentioned that to you. Is it glaring to you at this point? Is it Germany?

[00:02:32]>> No, no, no. It's panuropean, Joe. I mean, we have spent the last 20 years taxing the hell out of European air travel. You know, we have an environmental tax about €7 a ticket now on all only on intra European flights >> for carbon dioxide.

[00:02:46]>> Oh, yeah. you saving the planet and the hedgehogs and whatever else it was, but we exempt all the long haul flights. So, the Americans, the Chinese, the Gulf carriers are all exempt. We're just taxing the hell out of the poor dumb Europeans going on there two weeks holidays to Spain, Portugal, Italy, and Greece. The airlines across Europe are calling for abolition of that ETS. It is the dumbest taxation known in humankind.

[00:03:08]Uh, use Ursula Vanderlayan, who's the I call her useless. She's the president of the European Commission.

[00:03:13]>> Useless Vanderlayan.

[00:03:14]>> Useless Vanderlayan. She's been talking about making Europe more competitive for about the last 2 years. Of course, she hasn't had an idea, no initiative. She should start by abolishing environmental taxes on air travel. The Swedes now get it. The whole McGreth Thunderberg flight shaming. They've abolished the aviation tax and we're growing very strongly in Sweden. Europe needs to do likewise.

[00:03:33]>> Do you do Europeans ever look at Germany and wonder about the leadership there with with what's what's happening with >> I don't think much is the leadership. I mean it's just the whole >> should they be helping with Iran or with the strait >> Yahoo political issues you know look we all want an early solution to the strait you know it would have helped I think if the administration here had consulted more with the Europeans before they went in >> right >> you know but it is in everybody's interest to get the straits form reopened Europe's jet fuel doesn't come from the Middle East so we're if in that sense but high oil prices is not in the US ad is not in the good for the US economy it's good for the European economy. We need to get this thing fixed. I mean, I disagree with Trump on tariffs. I fundamentally disagree with, you know, Trump on a few things, but one of the things he's right on is Europe has been weak on defense spending. NATO needs to significantly up its game on defense spending. The only way Europe can fund that is by getting to a much more competitive economy and taxing things like lowfair air travel is not the way you get to a competitive.

[00:04:36]>> You're just taxing ourselves. So you're hedged, but the the country of Europe is is not hedged on. But could there could there be some recessions in in some of the countries that are less >> again? As you know, it depends on how long this goes on. I mean, if oil stays at $150 a barrel, uh, you know, for through to September through to the end of this calendar year, we're all going into recession, the US, Europe, everybody. I would be more optimistic. I think it will, you know, uh, there will be an end brought to the or the straits will reopen. Oil prices will trend back downwards again. I think by the time we get to the end of the summer, but what the hell do I know? I'm only some dumb schmuck working for an airline.

[00:05:12]>> And you didn't see any results any any pressure yet from from uh demand destruction from this or >> well funny enough because we're coming into the peak travel season in Europe.

[00:05:23]You know, we're seeing there's a little bit of nervousness out there into June, July, and August. We're having to price a little bit down to keep bookings going, but close in is very strong.

[00:05:32]>> Do you see the distinction? So one of the things that's fascinating to watch in the US >> is that these US airlines are killing it in the front of the plane. Killing >> back of the plane is more complicated story.

[00:05:43]>> Is that the same story in Europe or is that a completely different story?

[00:05:47]>> Yeah, I mean it is a similar story. I mean one of the things one of the fundamental difference in Europe and the US is we have much lower cost carriers >> across the board.

[00:05:56]>> Across the board like we wipe the floor with Southwest over here. I mean our cost per seat is about $40. Southwest cost per se is about under $20. So we're much lower cost.

[00:06:06]>> Is that a labor story? What is that?

[00:06:08]>> It's an efficiency bigger aircraft gauge type. Uh we just generally we don't distribute to travel agents. We're just much more ruthless about being lower cost. But there is a similar story with the legacy carriers in Europe because the Gulf guys are all grounded. The legacy guys are taking all the connecting traffic going to Asia, going to the US. I mean the Gulf carriers are in real tr essentially they're grounded.

[00:06:28]The Lufanzas, the BAS, the Air Frances are taking all that big long haul connecting and that is pricing up. So they're doing very well on the long haul stuff. But on the short hall piece, Ryan is wiping the floor with everybody because we have such a cost advantage.

[00:06:41]We're so well hedged. We will pay down the last of our bond. I have a 1.2 billion bond. We pay down next week. I'm completely debtree now with a fleet of 650 aircraft. So we're still growing very strongly in Europe, but there's lots of flaky lowfare but not so lowc cost carriers like the Spirits. There's a few of those in Europe.

[00:06:59]>> Can you speak to this and it's really because we have a US audience that's going to understand this. Do you think that in Europe there's so much more competition than there is in the US? Do you believe I mean we were just having a big debate a couple years ago whether Spirit uh before it went bankrupt should have been should have been acquired by JetBlue wasn't allowed to happen >> but there's all sorts of debates even today about whether American for example should merge with United. I don't think that's in the in the offing, but how do you see competition from your vantage point in Europe where there seems to be a lot of it compared to here?

[00:07:31]>> There's not that much anymore in Europe, Andrew. I mean, Europe is inexurably migrating towards four large carriers.

[00:07:36]You have over here United, Delta, um, >> American, >> American, and then you have Southwest, the big lowcost carrier. Europe is is going the same way. So, you'll have the three big legacy carriers, the BA family, the Air France, KLM, and Lansa.

[00:07:50]And then Ryan is going to be the kind of big uh dominant lowcost carrier. And the other guys who are stuck in the middle of the east jets, the whizzes, the Baltic airs are either going to get taken out or which I think well they'll be M&A or they'll fail.

[00:08:05]>> Okay.

[00:08:05]>> Uh and that's inevitable. So Europe runs about 10 years behind the US. Uh the US had the first the kind of the the were the first to deregulate. one of the few economic policies that Carter was successful with. But first, Europe copied that US success, but we're coming to the end of that now. And therefore, we're going to fundamentally be the only lowcost carrier in Europe. But the good news is we've ordered 300 aircraft from Boeing, the Max 10s, which we hope to take first delivery of in the spring of 27. That gives us growth to go from 200 million to 300 million passengers a year over the next 8 years by keeping airfares low in Europe. And the great advantage in Europe is the rest of them are dumb and high fair. So all we got to be is not so dumb and much lower price and we'll