Ryanair CEO Michael O'Leary Warns If Strait Of Hormuz Remains Closed Until September Or October, More Spirit Airlines-Like Bankruptcies Could Follow
Ryanair Holdings PLC (NASDAQ:RYAAY) CEO Michael O'Leary warned Monday that a prolonged spike in oil prices and an extended closure of the Strait of Hormuz could push weaker European airlines into bankruptcy, comparing the risk to the collapse of Spirit Aviation Holdings Inc. (OTC:FLYYQ) in the United States.
O'Leary Warns Weaker Airlines Could Fail
"If oil prices remain up at these levels, if the Strait of Hormuz remains closed until September or October, there's going to be airline bankruptcies in Europe, like you had Spirit over here in the States," O'Leary said on CNBC's "Squawk Box."
O'Leary said some European carriers resemble troubled low-cost rivals in the U.S., with cheap fares but cost structures too high to make money. He said he doubted the disruption would last through the summer, arguing that political pressure around the Memorial Day travel period and the approaching midterm campaign season could push the Trump administration to "declare a win" and pull back.
Ryanair Profit Jumps Despite Fuel Concerns
His comments came as Ryanair reported on Monday fiscal 2026 profit after tax, before exceptional items, of 2.26 billion euros ($2.63 billion), up 40% from a year earlier. Revenue rose 11% to 15.54 billion euros ($18.08 billion), helped by stronger fares and passenger growth to 208.4 million.
Ryanair's fourth-quarter loss of 86 cents per share beat analyst estimates of a 95-cent loss, while quarterly revenue of $2.942 billion topped estimates of $2.890 billion, according to Benzinga Pro.
Airline Prepares For Worst-Case Scenario
During the earnings call, O'Leary said some of "our flaky competitors" may not survive the winter if fuel prices stay elevated. Ryanair said it does not expect jet fuel shortages, citing improving alternatives outside Gulf Cooperation Council producers, but warned unit costs could rise if prices remain high. The company has hedged about 80% of its fuel needs through April 2027 at about $67 a barrel.
Meanwhile, Chief Financial Officer Neil Sorahan separately told CNBC that Ryanair has plans for an "Armageddon situation," though he does not expect one. He said the airline plans to operate a full summer and winter schedule, but weaker carriers already under stress could "go to the wall" this winter.
Price Action: Ryanair shares rose 5.12% to $56.09 on Monday, dipping 0.18% in after-hours trading, according to Benzinga Pro data.
According to Benzinga Edge Stock Rankings, RYAAY stock performs poorly in the short, long and medium-term performance metrics, although its Value score remains robust, ranking in the 85th percentile.
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