Ryanair CFO outlines contingency plans for ‘armageddon scenario’ as jet fuel crisis poses risk to vulnerable European airlines this winter

(SeaPRwire) –   The chief financial officer of a leading European low-cost carrier announced that the firm has established a strategy for a hypothetical ‘armageddon scenario’ driven by escalating jet fuel costs amidst the continuing Iran war.

RyanAir CFO Neil Sorahan warned that enduring high fuel prices could severely impact airlines already facing difficulties prior to the conflict, potentially pushing them out of business by winter. He noted that RyanAir is prepared for the worst-case scenarios should the U.S.-Iran dispute intensify.

“Do we have plans for some kind of Armageddon situation? Of course, we do, but I don’t see that coming to pass. As things stand, we’re operating a full schedule this summer, and plan to operate a full schedule into the winter period,” Sorahan stated during an interview with CNBC.

In a Monday discussion with CNBC, Sorahan mentioned that despite the fuel crisis, RyanAir is likely protected from the most severe impacts of rising oil prices. This is because the airline has hedged 80% of its summer fuel at rates lower than those paid last year. Consequently, he does not anticipate flight cancellations this summer or the addition of fuel surcharges, although fare increases remain possible.

“We haven’t promised no price increases,” Sorahan noted. “We price to fill the planes and the consumers pretty much decide what that pricing is going to be.”

The pressure on oil supplies resulting from the war and Iran’s control over the Strait of Hormuz—which previously saw the transit of 20 million barrels of oil daily—has propelled Brent crude prices to approximately $111 per barrel, an increase of about 18% compared to a month ago.

RyanAir did not immediately respond to ‘s request for comment.

With discussions between Iran and the U.S. stalled, and reports that President Donald Trump convened his national security team on Tuesday to review military options, it is uncertain if oil and jet fuel prices will decrease in the near future.

According to a Goldman Sachs report, Europe’s jet fuel inventory is expected to fall below the 23-day supply threshold in a matter of weeks. This shortage could lead to stricter rationing, flight cancellations, and the closure of smaller airports this summer.

However, in a separate conversation, RyanAir CEO Michael O’Leary remarked that he has experienced previous oil shocks, such as following Russia’s invasion of Ukraine and the 9/11 attacks: “This happens regularly within our industry,” he commented. He disputed predictions that Europe would run out of jet fuel.

“We met with all of our fuel suppliers in Paris last week. There’s no issues over jet fuel supply right now through to September,” he told Bloomberg on Monday.

Concerns regarding the Iran war’s effect on budget carriers like RyanAir have grown, particularly after Spirit Airlines ceased operations earlier this month after 34 years. The airline, which had previously faced financial turmoil and two bankruptcies, was devastated by the war and the surge in oil prices.

RyanAir’s stock has declined by over 23% this year, partly due to these anxieties. However, the airline’s shares climbed more than 5% on Monday after it reported a 40% rise in after-tax profit to nearly 2.3 billion euros (around $2.7 billion) and a 4% boost in passenger traffic in its latest financial results.

RyanAir CFO Sorahan indicated that while other European airlines might “get themselves into trouble” similar to Spirit due to high debt and mounting costs, RyanAir’s fuel hedging tactics will shield it. This strategy could even enable the airline to profit from the potential struggles of its competitors.

“About 700 million people a night are booking with RyanAir so there’s no shortage of bookings coming through,” he concluded.