Rising Jet Fuel Prices and Regional Conflict Threaten Airline Viability Amid Supply Concerns
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Neil Sorahan, CFO of RyanAir, said persistently high jet fuel prices may cause some airlines that were already struggling before the war to be hit even harder or potentially go out of business come winter. As for RyanAir, the company is prepared for even the worst possible situation if the conflict between the U.S. and Iran escalates.
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BloombergRyanair Operating 'As Normal' Despite Hormuz Closure: CFO Neil Sorahan, chief financial officer of Ryanair, discusses the Irish airline's full-year profit and rising fuel costs. "If jet fuel prices remain at the current levels, our 20% unhedged is going to be significantly more expensive than it was last year," he tells Bloomberg Television. (Source: Bloomberg)
CNBCRyanair has prepared for an "armageddon situation," amid the jet fuel crisis, the budget airline's chief financial officer told CNBC Monday.
Financial TimesRyanair suspends guidance after surge in jet fuel price Airline confirms new contract negotiations with chief Michael O’Leary after annual profits rise by a third
Washington Times BusinessThe Iran war has caused the price of jet fuel to more than double in some markets since late February and airlines are particularly vulnerable because fuel costs account for a huge chunk of their operating expenses.
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"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," Neil Sorahan told CNBC's Ritika Gupta in an interview.
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Fortune“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 told CNBC.
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Fighting around the Strait of Hormuz, from which a fifth of the world’s oil typically passes, has disrupted supplies and caused fuel prices to spike around the world.
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FortuneThe strain on oil supply caused by the war and Iran’s grip on the Strait of Hormuz, through which 20 million barrels of oil passed daily before the war, has skyrocketed the price of Brent crude to about $111 per barrel, around 18% higher than the price a month ago.
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NICOSIA, Cyprus — The European Union’s energy commissioner said Wednesday that while there is no immediate threat to jet fuel supplies, the possibility of a longer-term shortage cannot be ruled out.
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BBC BusinessOn Wednesday, the EU's energy commissioner, Dan Jorgensen, said he did not expect a serious shortage in the short term, but could not rule out supply issues in the longer term.
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01 Fortune RyanAir did not immediately respond to Fortune‘s request for comment. With negotiations between Iran and the U.S. stalled, and with President Donald Trump reportedly meeting with his national security team on Tuesday to discuss possible military options, it’s unclear whether oil prices—and by extension jet fuel prices—will fall anytime soon.
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02 CNBC "I think we will see some of the weaker carriers who were already struggling before the war possibly go to the wall in the winter," Sorahan said after the airline reported full-year earnings.
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03 Financial Times European oil refiners and airlines confident jet fuel shortages can be avoided Refiners maximise production and increase imports from US and Africa to offset loss of Middle Eastern supplies
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04 BBC Business Higher ticket prices for air travellers in Europe are "inevitable" because of the high cost of jet fuel, according to the head of the International Air Transport Association.
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05 Washington Times Business Commissioner Dan Jørgensen told reporters that any shortage will depend on how the Iran war and the situation in the Strait of Hormuz will unfold, as well as how airlines will react after some companies - including the German owners of the airline Lufthansa - canceled a significant number of flights.
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