Half the airlines would certainly go out of business if oil hit $200 a barrel," said O'Leary. "That could include Aer Lingus. Only the strong airlines would survive and that would be British Airways, Lufthansa, Air France and Ryanair."

O'Leary, however, dismissed the suggestion that Ryanair, which has a stake of about 29 per cent in Aer Lingus, would take over Aer Lingus if it became bankrupt. In October 2006, Ryanair made a hostile bid for Aer Lingus. In June 2007, the European Commission blocked the merger between Ryanair and Aer Lingus -- a decision later appealed by Ryanair. The result of this appeal could be announced next year.

"At $200 a barrel, all of the airlines would be massively loss-making," said Stephen Furlong, an analyst with Davy. "In a market downturn, is it more or less likely that Ryanair would get Aer Lingus? I'd say more. A scenario like that is a long way in the future, though."

Arjun Murti, the Goldman Sachs analyst who recently forecast that oil prices could hit $200 a barrel within the next six months to two years, predicted a few years ago that the price of oil would breach the $100 mark.

With oil prices soaring above $135 a barrel last Thursday -- almost double their price this time last year -- airlines are already grappling with rising fuel prices. Some believe a $1 increase in the price of a barrel of oil could add as much as €14 million to an airline's fuel costs. The British Airways chief executive, Willie Walsh, warned last week an oil price of $125 a barrel could wipe out his airline's profits.

"We have not seen half [of the fallout from rising oil prices] yet," said Furlong. "The cash flow of most airlines usually gets worse towards the end of the year as the season is not as busy as summer. You might see bankruptcies in the winter."

Enda Corneille, corporate affairs director with Aer Lingus, said low-cost carriers, such as Ryanair, were more likely to run into trouble on the back of rising fuel charges. "The more established carriers would be in a better position to survive than pure low-cost carriers, like Ryanair, as they would not be low-cost any more," said Corneille. "If oil hit $200 a barrel, airlines would not be buying aircraft and there would be more grounding of flights."

When asked if Aer Lingus has any plans to ground flights this winter, Corneille said: "It's something we are evaluating carefully. We have not been unaffected by oil prices."

Ryanair said this weekend that it will ground some of its flights in Dublin and London's Stansted Airport this winter. "This is not because of high oil prices," said O'Leary. "It's because of high airport charges." Last winter, Ryanair grounded some aircraft operating out of Stansted.

Meanwhile, Ireland's third biggest airline, Aer Arann, said last week it may seek a financial partner and lease out more aircraft on the back of rising fuel costs and an economic slowdown.

"The most likely one to go bust at $200 a barrel is Aer Arann," said O'Leary.

A spokeswoman for Aer Arann said the airline "is in a healthy financial state, with reserves to enable us to weather any storm".