Ryanair CEO Warns of Rising Airfares, Criticizes UK Tourism Tax Proposal

The chief executive of Ryanair, Michael O'Leary, has stated that he has "no doubt" flight prices will rise in 2027, attributing the expected increase to escalating oil prices and geopolitical conflicts. He also strongly criticized a proposed tourism tax by the Labour party in the UK, arguing it would deter international visitors.

O'Leary indicated that fares for Ryanair passengers and others are expected to increase significantly by the summer of 2027 due to higher oil costs. "Fares for Ryanair passengers and every other passenger into the summer of 2027 are going to rise materially, I believe, because of significantly higher oil prices," O'Leary said during a press conference in London.

The budget airline executive described the proposed UK tourism tax as a "double tax" on visitors who already pay Air Passenger Duty (APD) when flying into the country. He warned that if the tax is implemented, Ryanair would reconsider its capacity in the UK and potentially shift it to other European destinations with lower or no visitor taxes.

"Imposing a second visitor tax on hotel nights will deter even more visitors coming to the UK," O'Leary stated. "If this double taxation goes ahead, Ryanair will review its capacity in the UK and we will inevitably switch some of this capacity to zero tax, lower cost destinations elsewhere in Europe."

He further elaborated that potential visitors might opt for cities like Barcelona, Rome, Milan, Madrid, or Stockholm, where he claims costs, including accommodation and food, are generally lower and no additional visitor tax is levied at the point of entry. "You cannot double tax UK visitors and not lose them," he added.

O'Leary also provided context on the impact of fuel prices, noting that if Ryanair hedges at $100 per barrel next year compared to about $80 this year, its oil bill would increase by approximately 25%. He estimated the airline's current oil bill to be six billion, which could rise to seven-and-a-half billion next year under those conditions.

The airline has previously cautioned that some competitors might struggle to maintain operations or survive the upcoming winter if oil prices remain elevated. According to the International Air Transport Association, the average global price of jet fuel rose 7.4% in the week prior to the report, reaching $194.90 per barrel.

Earlier this month, Ryanair reduced its 2027 traffic target to mitigate losses and exposure to unhedged fuel costs. The airline indicated that sustained high oil prices could challenge the survival of less-hedged competitors, potentially leading to a material increase in short-haul airfares across Europe.

In recent news, O'Leary issued a public apology for comparing competitor airlines to "rapists," a statement that drew widespread criticism. He later reflected on his words, expressing sincere regret for the offense and upset caused, and committed to learning from the mistake.