European air fares could rise by as much as 20 percent in 2027, according to Ryanair chief executive Michael O'Leary, who warned that the Middle East conflict is driving up jet fuel costs faster than airlines can manage. Speaking at a news conference in Brussels, O'Leary predicted this would represent the biggest increase in European air fares in history over the next 12 months, with increases potentially ranging from 10 to 15 percent at minimum. He cautioned that many carriers lack adequate hedging against rising fuel costs, a situation he said would lead to airline bankruptcies and takeovers across the industry.
Jet fuel prices have climbed sharply in recent months as conflict in the Middle East has disrupted supply. The International Air Transport Association previously forecast that jet fuel prices would average $152 a barrel across 2026, compared with $90 in 2025, representing a 70 percent increase for the year and significantly cutting into airline profits. Jet fuel makes up a large proportion of carriers' operating costs, making these price swings particularly damaging to their financial performance.
The exposure to future price rises is uneven across the industry. Ryanair had hedged 80 percent of its 2026 fuel requirements at $67 a barrel when the Iran conflict began in late February, and alongside many other European carriers had protected itself for that year. However, O'Leary said the airline is 85 percent unhedged for 2027, with hedging contracts covering only 15 percent of fuel costs at $85 a barrel, while current spot rates are hovering at roughly double that level. Most other European carriers are in a similar position, O'Leary said, leaving them vulnerable to sustained high fuel prices.
EasyJet reported a £105 million annual rise in fuel costs in July, having hedged 62 percent of its fuel requirements for the first half of 2027 and 37 percent for the second half. The airline cut 700,000 seats from its winter schedule in October in a bid to conserve fuel. Ryanair announced it was cutting 20 routes and more than one million seats from Belgium in its winter schedule following the Belgian federal government's decision to increase its aviation tax from €2 to €7 from January.
Industry executives have warned of difficult conditions ahead, with some saying certain carriers may struggle to survive the fuel cost shock. Passenger surveys indicate that travellers expect higher fares and are willing to spend more, though airlines remain uncertain how long consumers will tolerate price increases.