The chief executive of Ryanair has projected significant fare increases across Europe for the coming year, attributing the rise to sustained pressure on jet fuel costs amid regional instability. He estimated potential fare increases ranging from 10 to 20 percent, which he characterized as the largest increase in European air fares on record for such a period.
Jet fuel prices have experienced sharp increases in recent months due to supply disruptions related to the war on Iran. Because fuel represents a major component of airline operating expenses, the elevated costs are expected to substantially compress industry profit margins. The International Air Transport Association projected jet fuel prices would average $152 per barrel across 2026, compared to $90 in 2025, representing a 70 percent increase for the year.
The exposure to unhedged fuel costs varies significantly among carriers. Ryanair had hedged approximately 80 percent of its 2026 fuel requirements at $67 per barrel prior to the February conflict onset. However, the carrier is only 15 percent hedged for 2027 at $85 per barrel, while current spot prices are trading around twice that level. Most other European airlines face similarly limited hedging positions from April 2027 onward. EasyJet reported a £105 million annual increase in fuel costs and has hedged 62 percent of its first-half 2027 fuel needs and 37 percent for the second half.
The sector is bracing for potential consolidation and failures. Industry leaders have warned that some carriers may not survive the fuel price shock. EasyJet has already begun reducing capacity, cutting 700,000 seats from its winter schedule. Ryanair announced reductions of more than one million seats from Belgium operations and elimination of 20 routes, partially in response to Belgian tax policy changes but also reflecting broader cost management efforts.
Consumer behavior will ultimately determine the extent of the impact. Passenger surveys indicate travelers anticipate higher fares and express willingness to pay increased prices, but the industry remains uncertain about how long consumers can sustain elevated ticket costs.
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