The Michael O'Leary show kicked off yesterday with the Ryanair boss calling regulators at the Civil Aviation Authority “hapless, stupid and incompetent” clowns.

This sort of language is typical from Mr O'Leary and indicative of the bolshie and, some would say, arrogant management style at Ryanair. Mr O'Leary has been able to get away with his aggressive attitude because he has turned Ryanair from a small Irish carrier into Europe's largest in little over a decade.

For all the bravado, Ryanair's chief executive does make mistakes, however. Witness his decision not to hedge against rising oil prices, which has left the airline almost completely exposed to oil at more than $130 a barrel.

British Airways has hedged about 65 per cent of its fuel needs this year at $85 a barrel and Flybe, which Mr O'Leary singled out yesterday as a potential casualty of high oil prices, is 76 per cent hedged.

Ryanair said yesterday that if oil were to stay at $130 it would break even this year, despite record profits of €481million last year.

Shareholders will be rueing the lost opportunity to hedge against this risk. Ryanair has also embarked on a huge capacity increase and took delivery of 30 extra aircraft last year. It will add a further 40 this year in the face of the soaring prices and falling consumer demand.

Mr O'Leary has argued that these aircraft will give him expansion options, but meanwhile he plans to ground 20 aircraft during the winter to cut capacity. Increased supply, reduced demand and higher overheads do not make a good combination, whatever Mr O'Leary says.

Then there is the €400million that Ryanair has spent building a 29.2 per cent stake in Aer Lingus, its Irish rival. Ryanair tried to buy Aer Lingus last year but was blocked by European regulators for competition reasons - a move that surprised nobody other than Ryanair.

Ryanair has continued to buy Aer Lingus shares, despite evidence that the Irish flag carrier was struggling. Yesterday Ryanair wrote off €92million thanks to the drop in Aer Lingus's share price during the past year.

Mr O'Leary's comments about “idiot” regulators and bureaucrats do not sound so clever when he himself is messing up.

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