Ryanair Chief Executive Michael O'Leary said in an interview on Monday that as fuel hedging contracts gradually expire, European airfares will see sharp increases, with next year's rise reaching as much as 20%.
The budget carrier's profit for the first half of its fiscal year fell 15% to 2.15 billion euros (about 2.3 billion US dollars), while the price of the 20% of its jet fuel that remains unhedged has doubled.
O'Leary said in the interview: "In 2027 we will face a situation of significantly higher oil prices... I think the cost pressure will be passed on, and airfares will rise markedly."
He added: "The situation in the Middle East has still not calmed down, and the current jet fuel price is 170 US dollars per barrel. Next year the entire industry will have to face this huge cost cliff. I judge that European airfares will rise 10% next year, and could even reach 20%."
Ryanair said the increase in short-haul ticket prices is expected to be insufficient to cover about 2 billion euros in additional fuel costs.
To that end, the company has launched a cost review plan, with measures including cutting crew meals, considering a temporary wage freeze, and using AI to further improve efficiency.
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