The head of Europe's largest budget airline said European air fares are set to rise next year on the back of fuel-cost headwinds stemming from the war in the Middle East.
"Airfares are going to go dramatically higher in 2027," Ryanair group Chief Executive Officer Michael O'Leary told reporters Tuesday. "You are going to see the biggest increase in airfares, I would say, in history in Europe."
O'Leary said the U.S. and Israel's war against Iran is the main reason for the expected increases. The conflict has sent oil prices soaring and could bring about a rise in ticket prices of "10%, 15%, maybe 20%," he said.
The conflict has taken a heavy toll on airlines, driving up jet fuel prices and leading customers to book their flights less far in advance as a result of the increased uncertainty.
"We are all going to be paying much higher oil prices," O'Leary said. He warned that the sector's margins will be squeezed as a result.
Dublin-based Ryanair has "strong fuel hedge positions" through 2026, O'Leary said. The company is 80% hedged at $67 a barrel to March 2027, he said. But from April next year, the carrier has very little hedging in place, O'Leary said.
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