Ryanair Group CEO Michael O'Leary said Monday that rising jet-fuel costs could lead to bankruptcies among European airlines [1].

The warning highlights a growing vulnerability in the aviation sector as geopolitical instability disrupts energy supplies. Because airlines operate on thin margins, a sudden spike in fuel costs can eliminate the liquidity of carriers that lack robust hedging strategies or cash reserves.

Speaking during Ryanair's quarterly earnings interview on CNBC's 'Squawk Box' on May 18, 2026 [1], O'Leary linked the current crisis to the war between Iran and Russia [1]. He said the conflict has driven up jet-fuel prices and restricted the flow of oil through the Strait of Hormuz [1].

"There will be corporate 'casualties' among European airlines if the Iran war continues and the Strait of Hormuz remains restricted," O'Leary said [1].

While some reports suggest that Europe will not physically run out of jet fuel, the financial impact of the price surge remains a primary threat [2]. The volatility created by the restriction of oil transit routes forces airlines to pay premiums that may be unsustainable for smaller, or less efficient, operators.

This financial pressure is expected to intensify as the year progresses. A Ryanair CFO said that weaker carriers who were already struggling before the war might "go to the wall in the winter" [3].

Ryanair, one of Europe's largest low-cost carriers, has historically maintained a more aggressive fuel-hedging strategy than many of its competitors. This positioning may allow the company to weather the price spike while other airlines face insolvency.

“"There will be corporate 'casualties' among European airlines if the Iran war continues"”

The intersection of the Iran-Russia war and the strategic importance of the Strait of Hormuz has transformed fuel from a manageable operational cost into a systemic risk. If fuel prices remain elevated, the European aviation market may undergo a forced consolidation, where only the most capitalized and efficient airlines survive, potentially reducing competition and increasing ticket prices for consumers.