Airfare prices could rise by as much as 20% in 2027, marking the largest price hike the European airline market has ever seen, warns Ryanair CEO Michael O’Leary, who stated that “we will see the largest increase in airfares in European history over the next 12 months.”
Speaking Tuesday at a press conference in Brussels, the head of the Irish low-cost airline argued that price hikes are now inevitable, as airlines cannot absorb the increased cost of fuel.
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In fact, according to O’Leary, European airlines will attempt to pass on a significant portion of the burden from higher aviation fuel prices to passengers, as reported by Bloomberg.
Ryanair CEO Michael O’Leary speaks in Brussels https://t.co/gUh0VlJOAL
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However, even a 20% increase in fares may not be enough to offset the costs, putting further pressure on airlines’ profit margins.
“The question is whether this increase will be enough to cover the dramatically higher fuel bills. I don’t think it will,” he said.
The surge in energy costs is one of the biggest challenges facing the airline industry, which is grappling with the consequences of the escalation of the war with Iran earlier this year.
Higher jet fuel prices have already taken a toll on airlines worldwide, while also negatively impacting demand for air travel.
The head of Ryanair noted that most European airlines, including his own, do not have significant hedging in place against oil price fluctuations for 2027.
This means that airlines will be more vulnerable to the possibility of oil prices remaining high. At the same time, limited available capacity in the European market and rising taxes are further weighing on the sector’s outlook.
Source: CNN.gr
