‘Jet fuel supply crisis is UNLIKELY to cause flight cancellations for Ryanair’

Michael O’Leary the chief executive of Ryanair has said that Ryanair does not anticipate that widespread flight cancellation will result from jet fuel supply problems in the coming weeks.

He told Travel Extra that what Fatih Birol of the International Energy Agency said on Thursday was largely true but “it has nothing to do with the current environment in Europe.”

“Europe normally holds between six and eight weeks of jet fuel supply. Tankers are arriving daily. The vast majority of Europe’s Jet A1 comes from the United States West Africa and Norway. Eastern Europeans including Poland and Romania import Jet A1 because of the Russian embargo being lifted. Most fuel companies report no issue with fuel certainly up until the end of May. Q8 which holds about 25pc market share in Britain faces a risk of shortages but BP and Shell and the others who supply the rest should be okay. Ryanair looks fine for the next six weeks.

If the situation drags on beyond another month or into May or June and the Strait of Hormuz stays closed for four five six seven or eight weeks disruptions are likely but they will occur on an airport by airport basis. Spain reports no problems because all of its supplies come from Venezuela. Italy reports no issues. Pricing will go up again. If the Strait of Hormuz stays closed for longer the price could rise from $150 a barrel today to $200 a barrel. Most of what is in Europe comes from the United States West Africa and Norway. Airports may put a restriction on uplift such as only 80pc of what has been ordered in which case Ryanair could tanker fuel in other cases. Ryanair would chop and change some mid-morning and midday flights on the day. The airline would try to preserve the early morning flights where the aircraft are based. Ryanair has aircraft based at 95 airports around Europe.

Dublin has about four or five weeks of supply. Ryanair would probably still have enough fuel to operate the morning first wave but it might remove the weaker midday flights on a Tuesday or a Wednesday. Cancellations would happen on the day in a manner similar to a strike situation or a big air traffic control delay.

The incident in Italy last week was an aberration caused by a problem with tanker deliveries to four smaller airports. Ryanair resolved the issue by backfilling or tankering fuel in and out of Italy. The bigger risks in the short term are to Ireland and Britain. Ireland has limited storage capacity on the island. One of the learnings from this situation is that more storage capacity is needed and less green energy policy.

“What Fatih Birol of the IEA said Thursday was largely you know true but nothing to do with the current environment in Europe normally sits on about between six and eight weeks of jet fuel supply. The vast majority of Europe’s jet A1 comes from the US, West Africa, and Norway. We don’t see at this point in time there being a major problem. Most of the fuel companies are telling us no issue with fuel certainly up until the end of May. Basically we look fine for the next six weeks but if this thing drags on beyond another month or into May or June and the Strait of Hormuz stays closed for four five six seven eight weeks there are likely to be some disruptions but it’ll be on an airport by airport basis.”

“If the Strait of Hormuz stays closed for longer then we think the price could go up from $150 a barrel today to $200 a barrel. We think some airports are likely to put a restriction of say you can only take 80pc of what you’ve ordered in which case we could tanker back in other cases. We would try to preserve obviously the early morning flights where the aircraft are based. We have aircraft based at 95 airports around Europe. Dublin has about four or five weeks supply so we probably still have enough fuel to do the morning first wave. You might take out the weaker middays on a Tuesday or a Wednesday or something like that but it’ll be a bit like a strike situation or a big ATC delay. We’ll have to cancel kind of on the day. There was some issue with some deliveries. There was tanker deliveries to four smaller airports and caused no issue because we could backfill or tanker in and out of Italy. The risks the bigger risks are likely to be in short-term deliveries to Ireland and Britain only because of Q8 25pc market share comes from Kuwait. Ireland just because we don’t have much storage capacity here on the island. One of the learnings out of this is we need a lot more storage capacity and a lot less green bullshit.”