Ryanair’s chief executive has predicted a record increase in European air fares next year, as airlines grapple with fuel bills pushed higher by the Middle East conflict.
Many carriers are not hedged against rising jet fuel costs, Michael O’Leary said, which he predicted would lead to airline bankruptcies and takeovers. He forecast these pressures would result in the price of plane tickets rising by as much as 20%.
“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,” O’Leary told a news conference in Brussels.
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’ costs. The airlines body IATA previously predicted jet fuel prices would be 70% higher across 2026 – estimated to average $152 (£114) a barrel for the year, compared with $90 in 2025 – slashing airlines’ profits.
Ryanair and many other European airlines had hedged their jet fuel requirements for 2026, O’Leary said, adding that Ryanair was 80% hedged at $67 a barrel at the time the Iran conflict began in late February.
However, the boss of Europe’s largest airline said most European carriers, including Ryanair, do not have significant hedging in place from April 2027 onwards to protect them if oil prices remain high.
“We’re 85% unhedged next year, and most of the other European airlines are in a similar position,” O’Leary said.
Ryanair’s hedging contract for 2027 covered 15% of its fuel costs at $85 a barrel, he added, whereas spot rates are currently hovering at about double that level.
EasyJet reported a £105m annual rise in fuel costs in July, adding it had hedged 62% of its fuel requirements for the first half of 2027 and 37% for the second half of the year. The airline announced in October it was cutting 700,000 seats from its winter schedule in an attempt to save fuel.
During his visit to Brussels, O’Leary announced he was cutting 20 of Ryanair’s routes and more than one million seats from Belgium from the airline’s winter schedule, after the federal government’s decision to increase its aviation tax from €2 to €7 in January.
O’Leary is the latest executive to warn of the downbeat outlook for aviation. Industry leaders have said some carriers will struggle to survive the fuel price shock. Passenger surveys have shown travellers are braced for higher fares and are prepared to spend more, but airlines do not know how long consumers will be able to afford pricier tickets.
