Rising oil prices are hurting Ryanair, chief executive Michael O'Leary said on Wednesday, but Europe's biggest low-cost airline can still avoid making a loss with oil prices at USD$125 a barrel.
"With oil at USD$125... we certainly won't make a lot of money," O'Leary told reporters. "I don't think we will lose money."
Ryanair warned in February that high oil prices, a faltering UK economy and weak sterling could halve profits in the coming year. But O'Leary still expects Ryanair to do much better in the current environment than most competitors.
"If yields (average ticket prices) fall by 5 percent this year and I think the oil price rises above USD$135 a barrel, then we would be at break even," he said.
O'Leary said the carrier had been "calling the oil market wrong" and would certainly resume hedging future fuel needs at below USD$100 a barrel, possibly even around USD$100-USD$110.
"Oil is really hurting us now," he said.
Investors have remained wary over the company's lack of protection against record oil prices.
O'Leary said the airline had hedged 2.5 percent of its total fuel needs for the next 12 months, around the "mid 70s" in dollar terms.
"There will be a deep recession unless oil prices fall," O'Leary said.
