Michael O’Leary, the CEO of Ryanair, has forecasted a significant increase in European air fares, potentially reaching 20% in 2027. This prediction stems from rising jet fuel costs driven by the ongoing conflict in the Middle East, which has left many airlines unhedged against these price hikes. O’Leary indicated that the financial strain could lead to bankruptcies and consolidations within the industry.
The International Air Transport Association (IATA) has previously projected a 70% rise in jet fuel prices for 2026, impacting airline profitability. Ryanair has hedged a portion of its fuel costs, but many European carriers remain vulnerable, raising concerns about their ability to sustain operations amid escalating expenses and consumer price sensitivity.