Ryanair CEO Michael O’Leary has warned European short-haul air fares are likely to rise next year as airlines face ‘significantly’ higher fuel bills.
As Ryanair announced a 15% drop in post-tax profits for the past six months, Michael said that by next summer, EU-based airlines will be running out of cheaper ‘hedged’ fuel, so he expects fares to rise ‘materially’ to reflect the higher prices they’ll have to pay.
He said he also expects to see competitors cut capacity.
“Unless there is a swift resolution of the Middle East conflict, we expect jet-fuel prices to remain elevated well into 2027,” he said.
Ryanair has 80% of its fuel hedged at around $67 a barrel for the year to March 2027, but only 25% covered at around $95 for the following year.
It estimates its fuel bill for the year to March 2028 will rise by around €2 billion, which Michael said was unlikely to be offset in full by raising fares.
The warning came as Ryanair reported profit after tax of €2.15 billion for the six months to 30 September 2026, down 15% from €2.54bn a year earlier. Passenger numbers rose 6% to 125.8 million, but average fares fell by 4%.
The airline said the price of the 20% of its fuel that was not hedged doubled to around $130 a barrel.
To help address the higher costs, Ryanair is reviewing spending across the group, including airport negotiations and labour agreements, and warned it might impose temporary pay freezes.
The airline plans to grow to over 220m passengers next year, supported by the first 16 Boeing 737 MAX-10s from spring 2027.
It said it is prioritising countries and airports that cut aviation taxes and fees, including Albania, Italy, Morocco, Slovakia and Sweden, while switching flights away from Austria, Germany and regional Spain.
For this winter, Ryanair has cut its traffic target for the year to March 2027 from 216m to 214m passengers, meaning traffic from November to March will be broadly flat on last year.
It said fares for October to December are trending modestly ahead of last year, but bookings are being made closer to departure.
