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Cheap flights in Europe face a fuel cost reckoning as Ryanair’s CEO says fares could rise up to 20% next year because of the Iran war
Ryanair CEO Michael O'Leary warns European airfares could rise up to 20% next year as the Iran war pushes up fuel costs.
Key points
- Ryanair CEO Michael O'Leary expects European airfares to rise by 10%, and maybe 20%, next year.
- Ryanair has locked in $67 per barrel for 80% of its fuel needs through March 2027.
- Brent crude stood around $110 per barrel on Monday, up 70% from a year ago.
Why it matters. Higher fuel costs could raise airfares for travelers, including Americans planning European trips, and may force rivals to cut capacity and raise prices.
Ryanair CEO Michael O'Leary told CNBC after the airline's Monday earnings call that he expects European airfares to rise 10%, and maybe 20%, next year because of higher fuel costs tied to the Iran war. Ryanair has locked in $67 per barrel for 80% of its fuel needs through March 2027, but only 25% of the following year's needs are hedged at about $95 per barrel. The company said its annual fuel bill will rise by about 2 billion euros next year, and Brent crude stood around $110 a barrel on Monday.
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Cheap flights in Europe face a fuel cost reckoning as Ryanair’s CEO says fares could rise up to 20% next year because of the Iran war
Michael O’Leary warns that European airfares could rise as much as 20% in 2027 as the Iran war drives up fuel costs and forces airlines to cut flights. Americans planning next year’s summer Euro trip may want to start saving now as the Iran war pushes up fuel prices and the CEO of the world’s biggest budget airline warns that the continent’s notoriously cheap short-haul flights could soon become more expensive. Ryanair CEO Michael O’Leary said on CNBC following the company’s earnings call Monday that he expects European airfares to rise by 10%, and maybe even 20% next year, potentially dealing another blow to Americans hoping to visit multiple European destinations without breaking the bank. Americans made nearly 24 million trips to Europe in 2025, a 5% increase from the previous year. Summer is one of the busiest tourist seasons for the region, and this year the European aviation network handled an average of 35,959 flights per day between June and August, a 2.4% increase from last year, according to The European Organisation for the Safety of Air Navigation . But the Iran war, now in its ninth month, has disrupted global supply chains, including by effectively closing the Strait of Hormuz, through which about 20% of the world’s oil passed before the war. That has driven up oil and jet fuel prices increasing the burden on airlines, for which fuel is the s econd-biggest expense.