Ryanair Group CEO Michael O'Leary said Monday that rising jet-fuel costs could force several European airlines into bankruptcy [1, 2].
This warning comes as geopolitical instability threatens the global aviation industry's cost structure. If fuel prices continue to climb, weaker carriers may lack the liquidity to survive the upcoming winter season, potentially disrupting air travel across the continent.
Speaking on CNBC's "Squawk Box" on May 18, 2026 [1, 2], O'Leary said there will be corporate "casualties" among European airlines if the Iran war continues and the Strait of Hormuz remains restricted [2]. The CEO said that Ryanair has developed "Armageddon" contingency plans to protect its own operations from such volatility.
The spike in operating costs is tied to the ongoing Iran-Israel conflict and the resulting restrictions on the Strait of Hormuz [2, 3]. These factors have inflated the price of jet fuel, placing immense pressure on the profit margins of airlines that do not have robust hedging strategies.
Ryanair CFO Peter Bellew said these concerns regarding the fragility of the industry. Bellew said, "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" [3].
While Ryanair remains positioned to weather the crisis, the broader European market faces a period of consolidation. The combination of pre-existing financial struggles and new geopolitical shocks creates a precarious environment for budget and legacy carriers alike, especially those with high debt loads.
“there will be corporate "casualties" among European airlines”
The situation highlights the extreme vulnerability of the aviation sector to geopolitical flashpoints in the Middle East. Because jet fuel is a primary operating expense, restrictions in the Strait of Hormuz act as a catalyst for insolvency among airlines with thin margins. This suggests a coming wave of industry consolidation where only the most capital-efficient carriers survive.
