European airfares could see a significant rise by 2027 due to increasing jet fuel costs driven by the ongoing conflict in the Middle East, according to a warning from Ryanair CEO Michael O’Leary. He anticipates that ticket prices might surge by as much as 20%, a scenario that could challenge the financial stability of some airlines, leading potentially to bankruptcies and further industry consolidation.
O’Leary noted that over the next 12 months, airlines are expected to face unusually sharp increases in fuel expenses, a major component of their operating costs. Ryanair has hedged approximately 80% of its 2026 fuel needs at $67 per barrel, providing some protection against these rising costs. However, from April 2027 onward, the airline’s hedging coverage drops significantly to just 15% at $85 per barrel, leaving it vulnerable to market fluctuations.
The situation is not unique to Ryanair, as other European carriers also face exposure to potential fuel price hikes. EasyJet, for example, has already reported rising fuel expenses and has announced plans to trim its winter schedule to manage costs. The airline has managed to secure some fuel-price protection for parts of 2027, but the broader impact of increased fuel costs remains a concern.
In addition to fuel-related challenges, Ryanair is also reducing its operations in Belgium, cutting 20 routes and over a million seats from its winter schedule in response to a planned increase in the country’s aviation tax from €2 to €7 in January. This move underscores the broader financial pressures airlines are facing in the current economic climate.
The outlook raises concerns for both airlines and travelers, as airlines may pass on the increased costs to passengers through higher ticket prices. However, there is uncertainty about how long passengers will be able to afford more expensive air travel, given the potential for continued economic pressures.