With the ongoing conflict in the Middle East impacting jet fuel costs, European airfares are expected to rise significantly in the coming years, according to Ryanair CEO Michael O’Leary. He cautioned that airfares could increase by up to 20% in 2027, raising concerns about financial instability for airlines and potential industry consolidation.
Jet fuel, a major cost for airlines, is expected to exert financial pressure as its price continues to rise. O’Leary anticipates a sharp increase in ticket prices over the next 12 months as carriers grapple with these elevated fuel expenses. While Ryanair has hedged a substantial portion of its 2026 fuel needs at $67 per barrel, the airline has significantly less protection for 2027, with only 15% of its fuel requirements hedged at $85 per barrel. This leaves Ryanair vulnerable to market fluctuations beyond April 2027.
Other European airlines are similarly exposed to potential fuel price increases, with EasyJet already experiencing higher fuel costs. EasyJet has announced plans to cut its winter schedule in a bid to manage expenses and has also secured some fuel-price protection for 2027.
Aside from fuel challenges, Ryanair is also responding to regulatory changes, such as Belgium’s planned aviation tax increase from €2 to €7 in January. This has prompted the airline to cut 20 routes and over one million seats from its Belgium winter schedule.
The prospect of rising fares poses a dilemma for both airlines and travelers. While carriers may adjust ticket prices to counterbalance increased costs, there is uncertainty about the extent to which passengers will be able to absorb these higher prices. This scenario underscores the financial pressures facing the airline industry and the potential for significant changes in the European air travel landscape.