Europe faces record airfare surge in 2027 as war drives up fuel costs, warns Ryanair boss
Ryanair CEO Michael O’Leary warns European airfares could rise up to 20% in 2027—the largest increase in history—as Middle East war drives fuel costs, squeezing airline margins.
BRUSSELS – Ryanair Holdings chief executive Michael O’Leary predicted the highest increase in European airfares in history in 2027 as the Middle East war continues to drive up oil prices, forcing airlines to pass on their fuel costs to consumers.
Ticket prices are set to increase by as much as 20% in 2027, O’Leary said on Oct 20 during a news conference in Brussels.
As a result, airline margins will get squeezed because even the jump in fuel surcharges will not make up for the higher oil bill, he said.
“You’re going to see the biggest increase in airfares, I would say, in history in Europe in the next 12 months,” O’Leary said. “The question is: Will that increase in airfares be enough to cover the dramatically higher oil bills? I don’t think it will be.”
The comments by the head of Europe’s largest budget carrier add to the more pessimistic outlook for the aviation industry, which has been forced to contend with a dramatic jump in costs even as travellers continue to splurge on air tickets.
O’Leary said most European airlines, including his own, lack significant hedging in 2027 to protect against higher oil prices.
In addition, there is less capacity in the market as some airlines struggle, while higher taxes are further dimming the picture for the industry.
“We’re 85% unhedged next year, and most of the other European airlines are in a similar position,” he said.
Ryanair dropped as much as 2.1%, bringing the decline to 25% for the year. At that rate, that would be the worst annual stock return since 2018.
O’Leary used his expletive-laden news conference to dish out against regulation in markets like France and Belgium, where Ryanair will reduce its footprint in response to higher taxes.
He reiterated that the European aviation industry will continue to consolidate as weaker players struggle to survive in a high-cost environment.
Air Baltic and Spain’s Volotea are the latest European carriers to undergo restructuring as higher costs take their toll.
Last week, Deutsche Lufthansa won the race against Air France-KLM to acquire a stake in Portugal’s state-owned TAP. Meanwhile, US private equity firm Apollo Global Management is laying out the framework to take over EasyJet.
Airlines across the world have suffered from soaring jet fuel costs since the Iran war escalated earlier in 2026, leading to lower consumer demand.
In September, Ryanair cut its annual passenger target for the fiscal year, saying it will fly fewer seats in the quieter winter season. BLOOMBERG
Source: The Straits Times https://www.straitstimes.com/business/companies-markets/europe-faces-record-air-fare-surge-in-2027-as-war-drives-up-fuel-costs-ryanair-boss-warns?ref=latest
