Ryanair CEO Michael O’Leary has warned that airfares in Europe could rise by up to 20% by 2027, primarily due to escalating jet fuel costs driven by the ongoing conflict in the Middle East. This surge in operating expenses may lead to financial strain for airlines, potentially causing bankruptcies and prompting industry consolidation.
O’Leary anticipates an unusually steep increase in ticket prices over the next year as carriers contend with higher fuel bills, a significant factor affecting airline profitability. While Ryanair has secured hedging contracts covering around 80% of its 2026 fuel needs at $67 per barrel, the airline is less protected from fuel price hikes beyond April 2027, with only 15% of its fuel requirements hedged at $85 per barrel.
Other European airlines also face exposure to fluctuating fuel prices. EasyJet has reported increasing fuel expenses and plans to scale back its winter schedule to manage costs. The airline has implemented some fuel-price protection measures for parts of the first and second halves of 2027.
In response to economic pressures, Ryanair is reducing its operations in Belgium, cutting 20 routes and over a million seats from its winter schedule. This decision follows a planned increase in the country’s aviation tax, set to rise from €2 to €7 in January.
The prospect of higher airfares poses challenges for both airlines and travelers. While carriers may pass on the additional costs to passengers, it remains uncertain how long consumers will withstand higher travel expenses.