Ryanair CEO predicts 20% airfare hikes next year

Ryanair CEO Michael O'Leary warned on Monday that European airfare prices could climb by as much as 20 percent next year. He attributed the projected increase to sustained high oil prices resulting from the ongoing conflict in the Middle East.

O'Leary stated in an interview with CNBC that the airline faces 2027 with much higher oil costs. He said these expenses will likely be passed on to passengers through significantly higher airfares.

Jet fuel prices have fluctuated sharply since U.S. and Israeli attacks on Iran began. According to the International Air Transport Association, the global average price for jet fuel was about $99 per barrel on February 27. By early April, prices more than doubled to reach $209 per barrel.

Prices fell for nearly three months before rising again. The IATA reported that the global average reached $195 per barrel in mid-September and is currently hovering around $196 per barrel. This refined fuel is one of the largest operating expenses for airlines.

The IATA expects fuel to account for nearly one-third of airline operating expenses this year. This represents a sharp increase from about a quarter of expenses in 2025. Diesel and jet fuel compete for space at refineries, meaning shortages in one product can pressure the price and availability of the other.

Major U.S. airlines have already cut less profitable flights and raised fares and baggage fees. However, those carriers noted that higher passenger revenue initially covered only part of their soaring fuel costs.

Ryanair stated that it does not expect European short-haul airfares to fully offset its anticipated fuel bill for next year. The airline is reviewing its costs and may impose temporary pay freezes. It also plans to lower crew ratios and use more artificial intelligence to increase productivity in back-office and support functions.