European Airlines: Ryanair Rising, Part III. Consolidation is not over yet

Research evidence excerpt

European Airlines: Ryanair Rising, Part III. Consolidation is not over yet

22 June 2026

European Transport

European Airlines: Ryanair Rising, Part III. Consolidation is not

over yet

Consolidation still has room to run in Europe, either through acquisition, or airline failure. The Alex Irving, CFA

+44 20 7676 7044 peak period for failures is after summer, with over 50% of European airline bankruptcies

alex.irving@bernsteinsg.com happening in the last four months of the year. We see bankruptcy risk as highest among

airlines with poorer access to capital. These remain plentiful: the big six airline groups control

Antoine Madre only 70% of capacity. Ryanair has historically invested countercyclically to take advantage of

+33 1 58 98 74 52

antoine.madre@bernsteinsg.com airline exits, and its net cash balance sheet and high teens operating margin positions it to do

so again.

Bankruptcy risk remains ever-present. Aviation is a low-margin, cyclical industry, with

a largely commoditized product, high commodity price exposure, and low switching costs.

Bankruptcies are a perennial feature in the European airline sector, heightened at times of

rising fuel prices or macro weakness. Even as peace between the US and Iran has taken fuel

prices down from their highs, these are still up c. 40% YTD.

Access to capital is the trigger for failures, concentrated in Q4. Airlines fail because

they run out of cash. They can run with uncomfortably high leverage ratios, and print losses,

for years on end, but the instant the cash runs out, the airline ceases operations. Creditors

are typically willing to extend goodwill through the peak summer earnings period, and

more commonly pull the plug in Q4. More than 50% of bankruptcies happen September-

December.