Ryanair has issued a stark warning that Wizz Air and airBaltic may not survive the upcoming winter due to the ongoing jet fuel crisis. The airline's chief executive, Michael O'Leary, has stated that both carriers could exhaust their cash reserves by the end of the winter season, as fuel costs continue to soar amid geopolitical tensions in the Middle East.
Fuel Costs Surge Amid Strait of Hormuz Blockage
O'Leary highlighted that Ryanair's own fuel expenses increased by £50 million this month alone, and cautioned that the situation could worsen if the Strait of Hormuz remains blocked due to the conflict between Iran and the United States. He pointed out that Wizz Air and airBaltic are particularly vulnerable because they have not locked in lower fuel prices through hedging.
According to O'Leary, if oil prices do not decline, both airlines could run out of cash by the end of the year, potentially leading to their collapse as early as October or November. He remarked, "If oil stays at these levels, two or three European airlines in October or November could go bankrupt like Wizz Air, which wants to sue me but won’t have enough time to do so, and airBaltic."
Wizz Air Responds
In response, a spokesperson for Wizz Air strongly denied O'Leary's claims, stating, "Michael O'Leary’s recent comments about Wizz Air's financial prospects are flatly untrue and false." The spokesperson emphasised that Wizz Air maintains a strong balance sheet with substantial liquidity and funds its aircraft 18 months in advance. They added that leasing companies and financiers compete vigorously for opportunities with the airline, underscoring its stability.
The spokesperson further noted, "Wizz Air is one of the best hedged airlines in the industry against rapidly changing fuel prices, while our fleet is already 75% A320neo family aircraft, providing a structural cost advantage compared to any other airline in Europe through significantly lower fuel burn and greater efficiency." They also highlighted the airline's long-standing relationships with leading lessors and manufacturers, allowing it to execute its fleet strategy without disruption.
Expansion Plans Continue
Despite the warning, Wizz Air insists it continues to expand rapidly across Italy and other key markets. The spokesperson concluded, "Our focus remains exactly where it should be: delivering the lowest fares, operating the youngest and most fuel-efficient fleet of aircraft, and serving millions of our customers!"
