Air passengers in Europe could face an unprecedented wave of fare increases, according to Ryanair Chief Executive Michael O’Leary. He says ticket prices could rise by up to 20% in 2027, which would be the biggest increase the European aviation market has ever seen. The war in the Middle East and rising oil prices are sharply driving up airlines’ operating costs.
“The biggest fare rise in European history”
At a press conference in Brussels on Tuesday, the head of the Irish low-cost airline said fare increases are now unavoidable, because carriers can no longer absorb higher fuel costs.
“We will see the biggest increase in air fares in Europe’s history over the next 12 months,” he said, as reported by Bloomberg.
According to O’Leary, European airlines will try to pass a significant share of the burden from higher jet fuel prices on to passengers.
Even 20% may not be enough
Even a 20% rise in fares may not be enough to offset the costs, which would put further pressure on airlines’ profit margins.
O’Leary questioned whether higher ticket prices would cover the sharp rise in fuel spending. “The question is whether this increase will be enough to cover the dramatically higher oil bills. I don’t believe it will be,” he said.
Fuel costs and the war with Iran
Soaring energy costs are one of the biggest challenges facing the aviation sector, which is dealing with the consequences of the escalation of the war with Iran earlier this year. Higher jet fuel prices have already hit airlines worldwide, and they are also weighing on demand for air travel.
Little protection against oil prices
O’Leary noted that most European airlines, including Ryanair, have no significant hedging against oil price swings for 2027. As a result, they will be more exposed if oil prices stay high.
At the same time, limited capacity in the European market and rising taxes are further clouding the sector’s outlook.
Cutbacks in France and Belgium
O’Leary strongly criticised the regulatory and tax environment in some European countries, particularly France and Belgium. He said Ryanair plans to reduce its presence in both markets in response to higher taxes on aviation.
Weaker airlines under pressure
He also predicted that pressure from higher operating costs will speed up consolidation in the European aviation market. In his view, financially weaker airlines will find it increasingly difficult to survive, which would open the way for further consolidation.
Ryanair revises its targets
These challenges have already affected Ryanair’s planning. In September, the airline lowered its annual passenger target for the current financial year. It also announced that it will offer fewer seats in the winter season, when travel demand is traditionally lower.
With information from Bloomberg and Newmoney
