O'Leary: Airlines are going to topple due to high oil prices
On MAy 22, Ryanair CEO Michael O'Leary told CNBC that he expects some of their European rivals to request payment deferral in the coming months. The high fuel costs mean that a number of airlines in the region would fail, according to the Irish executive
A price of $80 for a barrel of oil will ensure the change of the competitive landscape in Europe this winter, O'Leary says.
Some airlines did not make money last year when oil cost was $40 a barrel, and I do not think they survive this winter if oil prices stay at these higher levels,he added.
Yesterday, on May 21, Ryanair reported a record year profit despite concerns. Nevertheless, O'Leary said that in the short term he is pessimistic about the growth prospects of the company, amid higher fuel costs.
Europe's largest low-cost carrier reported a record profit of 1.45 billion euros ($1.7 billion) after tax in the first quarter that ended on 31 March.
That was an increase of 10 percent compared to the previous year. The company exceeded the expectations of analysts. But the same figures will not be achieved in the coming financial year, O'Leary thinks.