Ryanair CEO Predicts 20% Surge in European Air Fares for 2027 2026

European air fares could surge by as much as 20% in 2027, according to Ryanair chief executive Michael O'Leary, as airlines grapple with soaring jet fuel costs driven by the Middle East conflict. O'Leary warned that many carriers are not hedged against rising fuel prices, which could lead to bankruptcies and takeovers across the industry.

Speaking at a news conference in Brussels, O'Leary said: "You're going to see air fares rise next year in Europe, I think by 10, 15, maybe 20%. You're going to see the biggest increase in air fares, I would say, in history in Europe for the next 12 months."

Why Jet Fuel Costs Are Skyrocketing

Jet fuel prices have soared in recent months as the war on Iran has choked off fuel supplies. Jet fuel accounts for a large portion of carriers' operating costs, so any spike directly hits airline profitability.

The International Air Transport Association (IATA) previously predicted that jet fuel prices would be 70% higher across 2026, averaging $152 (£114) a barrel for the year, compared with $90 in 2025. That increase is expected to slash airlines' profits and force them to pass costs onto passengers.

Hedging: A Temporary Shield with an Expiry Date

Ryanair and many other European airlines had hedged their jet fuel requirements for 2026. O'Leary noted that Ryanair was 80% hedged at $67 a barrel when the Iran conflict began in late February.

However, he cautioned that most European carriers, including Ryanair, do not have significant hedging in place from April 2027 onwards. That means they will be fully exposed to market prices, making fare increases inevitable if fuel costs remain high.

What This Means for Airlines

O'Leary predicted that the fuel cost squeeze would lead to airline bankruptcies and takeovers. Smaller, less financially robust carriers are most at risk, potentially reshaping the competitive landscape in Europe.

Ryanair, as Europe's largest airline, may be better positioned to weather the storm, but even it is not immune to the pressures.

• Fare hikes: European air fares could rise by 10-20% in 2027, the biggest increase in history.
• Fuel costs: Jet fuel prices are forecast to average $152 a barrel in 2026, up from $90 in 2025.
• Hedging gap: Most airlines have no significant fuel hedging from April 2027, leaving them exposed.
• Industry shakeout: Bankruptcies and takeovers are likely as weaker carriers succumb to higher costs.
• Passenger impact: Travelers should budget for higher ticket prices on European routes.

How Higher Fares Could Affect Travelers

For consumers, the forecast means that European air travel will become more expensive. Budget-conscious travelers may need to book earlier, opt for alternative destinations, or consider rail for shorter trips.

Airlines might also cut routes or reduce frequencies to manage costs, further limiting options. The era of ultra-cheap flights in Europe could be coming to an end, at least temporarily.

Comparison of Jet Fuel Prices and Airline Hedging

What to Watch Next

Oil price movements and geopolitical developments in the Middle East will be key. If the conflict escalates or supply disruptions persist, fuel costs could stay elevated longer, making the 20% fare hike more likely.

Also watch for airline consolidation. O'Leary's prediction of bankruptcies and takeovers could lead to a less competitive market, which might keep fares high even after fuel prices stabilize.

For now, travelers should prepare for higher costs. As Ryanair warns of a 20% jump in European air fares, other carriers may follow suit, making 2027 a challenging year for budget travel.

As the industry braces for turbulence, the ripple effects will be felt across the travel sector. For a deeper look at how fuel costs are reshaping airline strategies, see our analysis of Ryanair's warning on European air fares.

Infrastructure projects are also adding to the cost burden. The Heathrow expansion costs are expected to raise passenger fares for decades, compounding the pressure on travelers.

Meanwhile, political decisions can influence operating costs. Andy Burnham's first week as PM saw focus on bus fares, VAT, and business rates, which could affect airline taxation and subsidies.

Safety incidents also shape public perception and regulatory scrutiny. The Ryanair Air Malta window blowout highlighted causes and safety risks that airlines must manage.

In extreme cases, passengers have faced life-threatening situations. The Ryanair passenger sucked out of plane window survival story underscores the importance of safety protocols.

Personal accounts often bring these issues to light. The wife's heroic story of a passenger almost sucked out of a window reveals the human side of aviation incidents.

Understanding the technical failures is crucial. Why the Ryanair Air Malta plane window blew out mid-air provides insight into mid-air emergencies and their causes.