Ryanair CEO Forecasts Record European Airfare Rise as Fuel Costs Bite

Ryanair group chief executive Michael O'Leary said on Tuesday that European airfares will record their steepest rise ever next year, forecasting increases of 10, 15 or possibly 20 percent in a market where most carriers have left their fuel bills exposed to price swings. Speaking at a news conference in Brussels, he tied the outlook to bankruptcies and takeovers that he expects to remove seats from the market, along with hedging gaps across the industry.

The warning lands in a weak stretch for the region's carriers. The conflict in Iran has pushed jet fuel prices sharply higher since the end of February, eroding margins at airlines that buy fuel at market rates. O'Leary said Ryanair and several other European carriers locked in strong positions for 2026, with Europe's largest airline 80 percent hedged at $67 per barrel through March 2027 when the conflict began.

Hedging cover runs out

That protection thins quickly. From April 2027, most European airlines will have very little hedging in place, according to O'Leary. Ryanair itself has just 15 percent of next year's fuel costs covered at $85 a barrel, he said, while spot rates are around twice that level. The airline trimmed its annual passenger target in September and said it would cut seat capacity during the quieter winter months.

Belgium offered an immediate example of how policy and pricing interact. O'Leary was in Brussels to announce that Ryanair is removing 20 routes and more than a million seats from the country's winter schedule. The decision followed plans to raise the Belgian aviation tax to 7 euros in January from 2 euros now. He also criticized regulators in France and Belgium, markets where the airline is scaling back operations because of higher taxes.

The comments point to further consolidation across the sector as weaker operators struggle with high costs. O'Leary said airlines that are financially fragile will either fail or be absorbed, reducing the number of seats for sale. Fares of the size he described would mark the largest annual increase the region has recorded over a 12 month period.

What it means for travel jobs

For people working across airlines and aviation, the outlook mixes pressure with demand. Fewer routes and seats mean fewer cockpit, cabin crew and ground handling shifts in some markets, particularly where taxes rise fastest. At the same time, carriers that survive are likely to compete harder for pilots, maintenance crews, airport staff and customer service teams as they try to keep aircraft flying through a period of expensive fuel.

Travel agents, tour operators and hospitality businesses across Europe face a parallel test. If ticket prices climb by double digits, price sensitive leisure travelers may shorten trips or delay bookings, which would feed through to hotels and restaurants in destination markets. Corporate travel budgets could also come under review. Some carriers, meanwhile, may lean more heavily on loyalty programs and ancillary revenue to cushion the fare effect.

Aircraft orders and next steps

O'Leary also sounded an optimistic note on fleet expansion. He said he expects US certification of the Boeing 737 MAX 10 to be completed this month, which would let Ryanair take delivery of 16 aircraft in early 2027. The US transportation secretary, Sean Duffy, was expected to announce on Tuesday that the Federal Aviation Administration had approved the long delayed model after a navigation software problem threatened another postponement. New, more efficient planes would help offset part of the fuel burden.

Several signals are worth tracking over the coming months. The first is how quickly European carriers secure fuel contracts beyond March 2027, since most current cover expires around then. The second is whether consolidation produces the capacity cuts O'Leary predicts, and how that affects fares, route networks and staffing. The third is demand itself: if travelers pull back as fares and living costs rise, airlines may need to adjust schedules again, with knock on effects for employment in aviation and the wider visitor economy.