European Air Fares Could Rise Up to 20% in 2027, Ryanair Chief Predicts
Michael O'Leary says most European airlines are unhedged against jet fuel costs from April 2027 and warns of bankruptcies and takeovers
By AXY Business Desk ·
Key points
- Ryanair chief executive Michael O'Leary predicted European air fares could rise 10% to 20% next year, which he said could be the biggest increase in European history over 12 months.
- O'Leary attributed the pressure to jet fuel costs pushed higher by the Middle East conflict, and said many airlines are not hedged against them.
- O'Leary said Ryanair is 85% unhedged for 2027 and most other European airlines are in a similar position, with spot rates about double its $85 hedged level.
- EasyJet has cut 700,000 winter seats to save fuel, while Ryanair is cutting 20 routes and over one million seats from Belgium after a rise in the aviation tax.
Ryanair chief executive Michael O'Leary has predicted that European air fares could rise by as much as 20% next year, saying the increase could be the biggest in the continent's aviation history over a 12-month period. Speaking at a news conference in Brussels, he linked the forecast to jet fuel prices that have been pushed higher by the conflict in the Middle East, and said many airlines have not protected themselves against further increases. The comments, reported by The Guardian on 20 October 2026, point to a cost squeeze that could reach ticket prices, flight schedules and the survival of some carriers across Europe.
What O'Leary said in Brussels
O'Leary told reporters: “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.” His remarks were his prediction for the coming year, not a published fare schedule or an official industry estimate. The source material identifies him as the boss of Europe's largest airline, which gives his views weight across the sector.
O'Leary said many carriers are not hedged against rising jet fuel costs, and he predicted that this would lead to airline bankruptcies and takeovers. He presented the expected fare increases as the result of fuel bills that have risen because of the Middle East conflict. He did not attribute the forecast to any single airline's pricing decision, and the source does not describe any formal response from regulators or fare-setting bodies.
Fares are shaped by many factors, including demand for travel, competition on each route, and the timing of bookings. Fuel is one of the largest inputs in the cost of flying, but it is not the only one. That means the scale of any increase will depend on how airlines respond in the months ahead, including whether they absorb costs, cut seats or pass them on to customers.
How jet fuel prices surged
Jet fuel is the kerosene-based fuel that powers commercial aircraft. For airlines it is one of the largest single costs, so even moderate movements in its price can have a large effect on profits. Because the cost is so large, carriers watch fuel markets closely and plan their pricing and schedules around them.
According to the source material, jet fuel prices have soared in recent months as the war on Iran has choked off fuel supplies. The Middle East is one of the world's most important sources of oil and refined fuel products, so disruption in the region tends to push up prices in international markets. Airlines buy fuel on those markets, which means that a supply shock far away can reach European ticket prices within weeks or months.
The airlines' trade body, the International Air Transport Association, known as IATA, had previously forecast that jet fuel prices would be 70% higher across 2026. It estimated an average price of $152 (£114) a barrel for the year, compared with $90 in 2025. A barrel is the standard unit for measuring crude oil and refined fuel, and the higher the price per barrel, the more an airline pays for each flight. IATA's forecast pointed to significantly weaker airline profits, according to the source material.
The hedging gap explained
Hedging is a financial strategy in which a company agrees in advance to buy a commodity at a set price, protecting itself if market prices rise. Airlines use hedging to smooth out fuel costs from one period to the next, which helps them plan fares and schedules. A heavily hedged airline is shielded from short-term price spikes. An unhedged airline pays whatever the market charges when it buys fuel.
O'Leary said Ryanair and many other European airlines had hedged their jet fuel needs for 2026. He said Ryanair was 80% hedged at $67 a barrel when the Iran conflict began in late February. The position for 2027 is very different. “We're 85% unhedged next year, and most of the other European airlines are in a similar position,” he said. He added that Ryanair's hedging contract for 2027 covered 15% of its fuel costs at $85 a barrel, while spot rates, meaning the price for immediate delivery, are currently hovering at about double that level.
The source material says that most European carriers, including Ryanair, do not have significant hedging in place from April 2027 onwards. This is the core of the warning. If oil prices remain high, airlines without protection will pay market prices from April, and they will have to decide whether to absorb the extra cost, reduce capacity or raise fares. Because tickets are often sold months ahead of travel, the timing of these cost increases matters for passengers as well as for companies.
Capacity cuts and taxes across Europe
EasyJet has already reported the effect of higher fuel prices. In July, the airline said its annual fuel costs would rise by £105m. It said it had hedged 62% of its fuel requirements for the first half of 2027 and 37% for the second half of the year. In October, easyJet announced it was cutting 700,000 seats from its winter schedule in an attempt to save fuel. A winter schedule is the set of flights an airline operates during the colder months, and changes to it are typically announced in advance so that travellers can plan.
O'Leary also used his Brussels visit to announce cuts in Ryanair's Belgian operations. He said the airline is cutting 20 routes and more than one million seats from Belgium from its winter schedule. The source material links this decision to the federal government's move to increase its aviation tax from €2 to €7 in January. The source does not specify how the tax is applied, but the example shows how government charges can add to the cost base of an airline operating in a market, alongside fuel expenses.
Taken together, these moves show that capacity is already being trimmed in parts of the European market. Fewer seats can help airlines manage costs and protect their margins, but it also reduces choice for travellers and can support higher prices on the flights that remain. Each of these cuts is a company decision, and the source material does not suggest that they were coordinated.
What it could mean for passengers
For travellers, the most direct concern is price. If airlines face higher fuel bills from April 2027 and cannot cover them through hedging, fares could rise, particularly on routes where seat supply has been reduced. The Belgian cuts and easyJet's winter seat reduction suggest that some routes may become harder to fill at short notice, which could leave passengers with fewer options and less room to shop around.
For the wider economy, higher airfares can affect tourism, business travel and the links between regions. Holidaymakers may travel less, and companies may reduce trips for meetings. Airlines that struggle may cut routes, merge or leave the market, which is the outcome O'Leary has predicted. This could reduce competition on some European routes, with fewer carriers serving certain destinations. How far that goes will depend on how many airlines can secure their fuel supplies and manage their costs.
For people planning trips next year, the practical question is timing. Because fares are often sold in advance, booking earlier may offer some protection if prices rise, although this depends on market conditions that cannot be predicted from the source material. Travellers may also want to check schedules carefully, since route and seat cuts can change flight options after a booking is made.
What to watch next
Several developments will show whether O'Leary's forecast takes shape. The first is oil and jet fuel prices, particularly the spot rates that set the cost for airlines without hedging in place. The second is hedging updates from airlines. A larger share of fuel protected for 2027 would reduce pressure on fares, while a small share would leave carriers more exposed to market swings.
The third is schedules. Further winter and summer cuts in seats and routes would signal that airlines are managing costs by reducing capacity. The fourth is government policy. The change in Belgium's aviation tax shows that taxes can add to the cost of flying alongside fuel, and other governments could make similar decisions. The source material does not include an official forecast from regulators or a full industry projection, so the 20% figure should be read as the estimate of one prominent executive rather than a settled market outlook.
Questions and answers
How much could European air fares rise in 2027?
Ryanair chief executive Michael O'Leary predicted that European air fares could rise by 10%, 15% or maybe 20% next year. He described it as possibly the biggest increase in European air fares in history over the following 12 months.
Why are jet fuel prices rising?
The source material says the war on Iran has choked off fuel supplies and pushed jet fuel prices higher. IATA previously forecast jet fuel prices would be 70% higher across 2026, averaging $152 a barrel compared with $90 in 2025.
What does hedging mean for airlines?
Hedging is an arrangement that locks in a fuel price in advance to protect against market increases. O'Leary said Ryanair is 85% unhedged for 2027, so most of its fuel will be bought at market prices from April.
Why is Ryanair cutting routes in Belgium?
O'Leary announced Ryanair is cutting 20 routes and more than one million seats from Belgium in its winter schedule. The source links this decision to the federal government raising its aviation tax from €2 to €7 in January.
Topics: Ryanair, Michael O'Leary, European air fares, jet fuel prices, hedging, easyJet, Middle East conflict, airline industry
Sources: The Guardian Business