Now I'm no Economics Guru, or Mathematician, but with Oil prices set to rise to $200 a barrel by the end of Summer, how are the likes of Ryanair who I believe have NOT hedged their fuel going to make a profit?
At my Airline the Fuel is hedged until well into next year, so having to pay £1000 p/tonne of fuel won't cripple us....until then that is!
So, if Ryanair are taking say 100 pax to MJV and back, say 5 tonne burn each way - selling the seats for 1p (plus taxes of maybe £30), that is still only £6k, £4k short of the £10k for fuel alone, never mind airways, landing, handling fees etc.....
How can any Airline sustain this amount of loss, and more to the point, who will/is grounding aircraft and routes because of the fuel crisis.
My personal view is that there will be victims, and very soon. Oil will not stop rising until the Speculators/Brokers, US economy and governments sort themselves out. Until then airlines are going to have to 'box clever', ditch non-viable routes and keep everything crossed........
Tough times ahead....I predict $200 p/barrel by Sept!
