European airfares could see a significant increase of up to 20% by 2027 due to escalating jet fuel costs, according to Ryanair CEO Michael O’Leary. The ongoing conflict in the Middle East is driving up these expenses, which could potentially lead to financial strain for airlines, resulting in bankruptcies and industry consolidation.
O’Leary highlighted that ticket prices are expected to rise sharply over the next year as airlines grapple with higher fuel bills, a major operational cost. Ryanair has managed to hedge approximately 80% of its fuel needs for 2026 at $67 per barrel, insulating itself from immediate impacts. However, from April 2027 onwards, Ryanair is less protected, having hedged only 15% of its fuel requirements at $85 per barrel, making the airline vulnerable to market fluctuations.
Other European carriers are similarly exposed to potential increases in fuel prices. EasyJet, for instance, is experiencing rising fuel expenses and has decided to cut its winter schedule to manage costs. The airline has secured partial fuel-price protection for both halves of 2027.
In addition to fuel costs, Ryanair is adjusting its operations in response to external financial pressures. The airline plans to cut 20 routes and over a million seats from its winter schedule in Belgium due to an anticipated rise in the country’s aviation tax from €2 to €7 starting in January.
The situation presents a dual challenge for airlines and passengers alike. While carriers may raise ticket prices to counteract increased costs, it remains uncertain for how long consumers can sustain higher air travel expenses. The outlook suggests potential changes in the aviation landscape as companies and travelers navigate these economic pressures.