Dublin, Ireland. Ryanair CEO Michael O’Leary said the risk of a jet fuel supply shortage in Europe due to the Middle East conflict is receding, citing increased confidence from fuel suppliers. He said suppliers see no risk of disruption until the end of June.
Fuel supply outlook in Europe
O’Leary said fuel companies have become more confident in the last week or two, following earlier concerns that supply to Europe could be disrupted from early June if the conflict did not end. He told Reuters he discussed the situation during a conference call with Ryanair’s suppliers across Europe on Monday.
He dismissed a warning from Sweden on Tuesday of a potential shortage of jet fuel.
Timeline for potential disruption
O’Leary said that a month earlier suppliers had indicated there would be no problems until the end of May, but they now see no supply disruption risk until the end of June.
Britain exposure and contingency plans
O’Leary said he had previously identified Britain as the market most exposed to potential shortages due to the amount of oil it imports from Kuwait. He said that risk had also receded and that some of the larger oil companies Ryanair deals with have said they would step in in the unlikely event Kuwait runs short.
Demand and fare strategy
O’Leary said demand for last-minute bookings in April and May has been stronger than expected, but demand was “a little bit weaker” for flights between June and September. He said Ryanair has lowered some fares to stimulate demand.
He added that Ryanair would keep downward pressure on pricing to put pressure on rival airlines whose fuel costs are not hedged as far out as Ryanair.
How do you expect airline ticket prices to change if fuel supply risks continue to ease?