BALLSOUT, Ryanair is in comparison to other airlines in a bad position for 2008 because they are one of the few unprotected against $100+ oil, that's why this year will be a difficult for them, own mistake. But that is not what this is about.
Aviation as a whole suffers because the availability of cheap oil is crucial. Over the next years, as hedging contracts expire, all airlines will be facing the reality of expensive oil. There is no sign whatsoever that the price will stabilize at $120, or even $200-$300. And algae oil costs $800 p/b... The airlines that will survive are the ones that manage to change their business models in order to cope with these prices. From roughly $200 oil, low cost air travel will basically stop. The fuel bill will be in the region of 75-80 % of all costs for FR, so any saving will be a drop in the ocean. There will still be demand for efficient point to point travel, but the ability to compete on price diminishes. And that's why FR might have a problem.