European air fares could see a significant rise of up to 20% by 2027, largely driven by increasing jet fuel costs linked to the ongoing Middle East conflict, according to Ryanair CEO Michael O’Leary. He cautioned that the rising expenses may lead to financial strain for some airlines, potentially resulting in bankruptcies and industry consolidation.
O’Leary projected a sharp climb in ticket prices over the next year as airlines grapple with higher fuel bills, a major component of operational costs. Although Ryanair has hedged about 80% of its 2026 fuel needs at $67 per barrel, the company faces limited protection against price increases from April 2027 onward, having hedged only 15% of its fuel requirements for that year at $85 per barrel. This leaves the airline largely exposed to fluctuating market prices.
Other European airlines are also vulnerable to escalating fuel costs. EasyJet, for instance, has reported increased fuel expenses and plans to scale back its winter schedule as a cost-saving measure. The airline has secured some level of fuel-price protection for the first and second halves of 2027.
In addition to fuel price concerns, Ryanair is downsizing its operations in Belgium, cutting 20 routes and over a million seats from its winter schedule. This move follows an anticipated increase in Belgium’s aviation tax from €2 to €7 in January.
The potential rise in air fares poses challenges for both airlines and travelers. Carriers may pass on the added costs to passengers, but it remains uncertain how long consumers will tolerate higher prices for air travel.