Ryanair’s chief executive has forecast a significant rise in European airfares in 2027, driven by escalating jet fuel costs linked to the ongoing Middle East conflict. Michael O’Leary warned that many airlines are exposed to rising fuel prices, which could result in industry bankruptcies and increased consolidation.
O’Leary projected that ticket prices could increase by 10% to 20% next year, marking what he described as the largest airfare rise in European history over a 12-month period. The surge in jet fuel prices follows disruptions to fuel supplies caused by the conflict involving Iran, which has tightened global energy markets.
The International Air Transport Association (IATA) has also highlighted the pressure on airlines, estimating that jet fuel costs will average $152 per barrel in 2026—approximately 70% higher than the $90 per barrel expected in 2025. This significant price increase threatens to erode profit margins across the aviation sector.
While many carriers, including Ryanair, secured fuel hedges for 2026 to mitigate some of the financial impact, O’Leary noted that these protections largely expire in 2027. He stated that Ryanair is currently about 85% unhedged for the next year, a situation mirrored by many other European airlines, leaving them vulnerable to market fluctuations.
The aviation industry faces uncertainty as it balances escalating operation costs with passenger demand. Previous surveys indicate that travelers anticipate fare increases and are willing to pay more, but there is concern over how long consumers can sustain higher prices amid broader economic pressures.
O’Leary’s comments add to a growing chorus of airline executives expressing caution about the sector’s outlook, underscoring the challenges that airlines may face as fuel costs continue to rise and geopolitical tensions affect supply chains.