European air travel could become significantly more expensive by 2027 due to escalating jet fuel costs linked to the Middle East conflict, warns Ryanair CEO Michael O’Leary. This potential increase in airfares—up to 20%—could place financial strain on airlines, possibly leading to bankruptcies and industry consolidation.
O’Leary anticipates that ticket prices will see an unusual surge over the next year as airlines contend with higher fuel expenses, a major cost component for carriers. Sustained increases in jet fuel prices could severely impact airline profitability. Ryanair has hedged much of its fuel needs for 2026 at $67 per barrel, but from April 2027, the airline has much less protection, with only 15% of its fuel needs hedged at $85 per barrel.
This limited hedging leaves Ryanair, along with other European airlines, vulnerable to fluctuating market prices. EasyJet has already reported rising fuel costs and plans to scale back its winter schedule to manage expenses. The airline has secured some fuel-price protection for 2027, indicating that it is also preparing for potential volatility.
Additionally, Ryanair is set to reduce operations in Belgium, cutting 20 routes and over one million seats from its winter schedule in response to a planned increase in the country’s aviation tax, which will rise from €2 to €7 in January.
The prospect of increased airfares raises concerns for both airlines and travelers. While carriers may hike ticket prices to cover higher costs, there is uncertainty about whether passengers will continue to afford pricier air travel. This situation underscores the broader economic challenges facing the airline industry as it navigates rising operational costs and geopolitical tensions.