Ryanair would welcome higher oil prices

Michael O’Leary, chief executive of Ryanair, the low-cost airline wants higher oil prices so that his competitors might go out of business.

A barrel of Brent crude hit a record high last week of $92.15 which has sent the airline industry reeling. However, Mr O’Leary revealed his budget airline has fixed 90% of its fuel at $65 a barrel until March 2008 and said the group would welcome higher oil prices over the next 12 months.

He added that a lot of the companies operating in the low-cost space would go bust. The difference between our fares and theirs is the key here he said, we can still expand with higher oil prices. He said Vueling, the Spanish airline, SkyEurope, the Slovakian airline and Wizz Air, the Polish airline are ‘vulnerable’.

O’Leary believes the airline industry is going to suffer a downturn. In the past, these traditionally come after British Airways and Aer Lingus order new jets, which has just happened so Ryanair is prepared for this.

The chief executive concluded that easyJet would soon levy fuel charges, claiming it had abandoned the ‘low-cost’ model. He said fuel surcharges inflicted by competitors such as Air France, BA and Lufthansa had allowed Ryanair to keep its own fares higher.

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