More airline failures due to fuel costs: easy Jet boss

More airlines are likely to fail due to rising fuel costs, the boss of easyJet has warned.

Chief executive Johan Lundgren said “weaker players” face increasing pressure amid the price of oil reaching around 85 US dollars a barrel, compared with 69 US dollars in April.

He made the comments just nine days after the collapse of Primera Air, which left thousands of passengers scrambling to find alternative flights home and customers with future bookings having to seek refunds from credit and debit card companies.

Mr Lundgren expects more consolidation in the industry, with successful airlines or groups taking over struggling carriers.

He said: “The fuel price being up there and perhaps continuing to increase will put some of those weaker players in a more difficult situation. I think there will be a consolidation from the fact that we’re going to see more failures.”

He went on: “If you are exposed to fuel in the way that you haven’t hedged and you have a weakness in your model which means you don’t have resilience... then you should be worried.”

In April, British Airways owner IAG acquired a 5% stake in Norwegian with a view to starting takeover discussions.

Norwegian has struggled to contain costs amid its rapid expansion, and had around £2bn of net debt at the end of last year.