European air fares could experience a significant increase by up to 20% in 2027, warned Ryanair CEO Michael O’Leary, citing rising jet fuel costs driven by the ongoing conflict in the Middle East. O’Leary expressed concerns that escalating operating expenses might lead some airlines to face financial difficulties, potentially resulting in bankruptcies and industry consolidation.
O’Leary forecasts that ticket prices will see a sharp rise over the next year as airlines struggle to manage higher fuel bills. Jet fuel represents a substantial portion of airline expenses, and any sustained increase in prices could severely impact profitability. Ryanair has managed to hedge around 80% of its 2026 fuel needs at $67 per barrel, but its protection against higher prices from April 2027 is limited.
For 2027, Ryanair has hedged only 15% of its fuel requirements at $85 per barrel, leaving the majority of its projected consumption vulnerable to fluctuations in market prices. Other European carriers are similarly exposed to potential increases in fuel costs.
EasyJet, another European airline, has reported rising fuel expenses and plans to cut its winter schedule to manage costs better. The airline has secured some fuel-price hedging for the first and second halves of 2027, but it remains cautious about future price hikes.
Ryanair is also reducing operations in Belgium, cutting 20 routes and over one million seats from its winter schedule, following a planned increase in the country’s aviation tax from €2 to €7 in January. This move reflects the broader challenges airlines face in balancing costs with operational demands.
The outlook presents concerns for both airlines and passengers, as carriers may resort to increasing ticket prices to counter rising expenses. The uncertainty looms over whether travelers will continue to afford more expensive air travel in the coming years.