European airfare prices could increase by as much as 20% next year, driven by rising jet fuel costs and ongoing geopolitical tensions, according to Ryanair CEO Michael O’Leary.
"So we’re facing 2027 where we have much higher oil prices... I think they’re going to get passed on in significantly higher airfares,” O’Leary stated in a recent CNBC interview. The price of jet fuel has experienced significant volatility, particularly following increased military actions involving Iran.
Jet fuel prices have risen even more rapidly than crude oil prices, a trend exacerbated by the conflict. This surge reflects not only higher crude costs but also tighter supplies of the refined fuel, which constitutes one of the largest operational expenses for airlines. Major U.S. carriers have noted that while increased passenger revenue initially offset only a portion of their escalating fuel expenses, they have responded by cutting less profitable routes and increasing fares and baggage fees.
Globally, jet fuel averaged approximately $99 per barrel on February 27, the day before the conflict escalated. According to data from IATA’s Jet Fuel Price Monitor, prices more than doubled to $209 by early April. After a period of decline, prices reached $195 per barrel in mid-September and are currently hovering around $196 per barrel.
The International Air Transport Association (IATA) forecasts that fuel will account for nearly one-third of airlines’ operating expenses this year, an increase from about a quarter in 2025. As a result, Ryanair is reviewing its costs, considering measures such as temporary pay freezes, reduced crew ratios, and increased use of artificial intelligence for back-office functions to enhance productivity.