Ryanair sees small airlines going bust on high oil

 

Oil prices above $110 a barrel could force small regional European carriers to go bankrupt this winter, the chief executive of Europe's largest low-cost airline Ryanair said on Tuesday.

Michael O'Leary predicted consolidation in the airline industry, though he ruled out any interest by Ryanair in making acquisitions.

"With the possible exception of Aer Lingus , I don't think there are any airlines Ryanair would be interested in acquiring," O'Leary told reporters in Rome, where the company announced plans for seven new flight routes into the city's Ciampino airport.

Ryanair has been rebuffed in two hostile bids for its Irish rival Aer Lingus.

"I do think there will be further consolidation and further bankruptcies this winter if oil remains up at around over $110 a barrel," he said. "There's undoubtedly a second or third tier of small, regional and not so low-fare airlines in Europe, particularly in Spain and central Europe and some in the UK, that will go bust this winter if oil remains above $110 a barrel."

Ryanair on Monday said a 50% surge in fuel prices had pushed first-quarter profit below market expectations, but said higher summer sales would keep it on track to meet earnings targets this year.