Ryanair chief admits oil mistake

Michael O’Leary, Ryanair’s outspoken chief executive officer, has admitted publicly that he should have done more to effectively shield the airline from spiraling fuel costs. According to the Belfast Telegraph, O’Leary noted that he had “screwed up” in terms of protecting the airline from oil prices by hedging at €70, while it was still possible last year. Since Ryanair did not take this approach, the carrier must now deal with a massive 85 percent collapse in profits. Additionally, some analysts believe that the airline may end up generating a loss at the end of the year.

If Ryanair does, in fact, generate a loss, it will represent a dramatic reversal of fortunes for an airline which has long been seen as among the most economically healthy in all of Europe. Ryanair has been a success story for well over a decade and it has morphed from a modest regional company to one of the most recognized names in the low-cost travel industry.

O’Leary pointed out that he is certainly paying the price for not having hedged oil prices when it would have still been advantageous, since he is not only Ryanair’s CEO, but also a prominent shareholder and the recent series of gloomy financial news has brought about a decline in share values. O’Leary now believes that if oil remains at around $130 per gallon and if ticket prices fall by five percent, Ryanair will either break even or may generate a very small loss.

Thank you to the Belfast Telegraph for the initial report.

www.ryanair.com