Michael O'Leary, chief executive of Ryanair, predicted European air fares could rise by as much as 20% in 2027, citing elevated jet fuel costs driven by Middle East conflict.
O'Leary told The Guardian that many carriers lack hedges against rising fuel costs, leaving them exposed to price swings. He forecast the combination of unhedged exposure and higher fuel bills would trigger airline bankruptcies and takeovers across Europe.
The prediction rests on a single premise: that Middle East instability will keep jet fuel prices elevated through 2027 and that airlines unprepared for that scenario will face a cost crunch. O'Leary did not specify which airlines lack hedges, provide data on industry hedging rates, or detail the mechanism by which fuel costs would translate to a 20% fare increase rather than a smaller one.
Ryanair itself operates a low-cost model and has historically been more aggressive than competitors on fuel hedging and price discipline. O'Leary's forecast may reflect competitive advantage for his airline if rivals struggle with fuel bills and are forced to raise fares or exit markets.
The prediction assumes Middle East tension persists and disrupts oil supply or shipping lanes enough to affect jet fuel pricing through next year. It also assumes airlines cannot adjust routes, fuel efficiency or capacity to offset higher per-barrel costs.