Ryanair (RYAAY) is known for its affordable airfare. Because the tickets are so cheap, the airline carries more passengers than any other carrier in Europe.
It makes money despite its low fares by charging passengers extra for things like luggage and seat selection (known as ancillary revenue).
However, those cheap flight tickets that made the airline so popular now face a serious test. On Oct. 20, Ryanair’s CEO Michael O’Leary warned that ticket prices across Europe could increase by 10% to 20% in 2027.
He called it the biggest airfare rise in European history, while speaking at a press conference in Brussels, Daily Mail reported.
“You’re going to see the biggest increase in airfares, I would say, in history in Europe for the next 12 months,” O’Leary said.
Why Ryanair is bracing for a 2027 fuel shock
Airlines spend large amounts on jet fuel, and unfortunately, the prices of jet fuel have increased sharply because of the ongoing conflict in the Middle East. For most of this year, Ryanair hasn’t really been affected by the increase because it locked in 80% of the fuel its planes need at $67 a barrel until March 31, 2027, TravelWeekly reported.
Deals that lock in prices like that are called hedges, and they work like a fixed-rate contract that protects the airline from sudden price swings.
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Once Ryanair’s hedges expire in April 2027, the airline will have to pay the market rate at the time to get most of its fuel. And Investing.com reported that the airline has secured only 25% of its fiscal 2028 fuel needs so far at $95 a barrel. That is why O’Leary is predicting higher airfares.
“You’re going to see airfares rise next year in Europe, I think by 10, 15, maybe 20%,” O’Leary said, according to Euronews.
How the fare hike could hit everyday travelers
The impact of the airfare increase on regular flyers is simple. A Ryanair ticket that costs €50 today could cost roughly €60 next summer at the high end of the range of increase O’Leary predicted. And because rival budget airlines will face the same fuel problem, I think baggage and seat selection fees could increase as well.
The airfare increase will not affect everyone at once. Belgium flyers will feel the impact first because, starting in January 2027, Belgium is raising its aviation tax from €2 to €7. And Ryanair is responding by cutting 20 routes and 1.1 million seats, Euronews reported.
The company also said it is moving six aircraft from the country to cheaper European markets.
How Ryanair plans to protect its margins
O’Leary admitted that even with the airline raising its fares, the increases will not fully cover its rising fuel bill. And with oil prices still fluctuating because of tensions in the Middle East, Ryanair has also held back from issuing its full-year profit guidance. The company said it lacks enough visibility to give investors a reliable number.
Ryanair is not the only airline whose hedges are set to expire next year.
“None of our competitors are well hedged either,” O’Leary said, according to the Connexion. So it is an industry-wide problem.
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That is why Ryanair is making some moves to protect its margins. The company’s management is reviewing a plan to temporarily freeze staff pay and is relying more on AI to cut office costs.
The airline is also pressing airports for lower fees. The fuel hike pressure has already shown up in the company’s numbers. In the first quarter that ended June 30, 2026, Ryanair’s profit fell 34% to €538 million due to the remaining 20% of its fuel costs that remain unhedged and lower fares, the Irish Times reported.
What RYAAY investors should watch next
Ryanair has good cash flow and very little debt, which puts it in a better position than most of its rivals going into the unhedged period. The company’s financial cushion should keep it operating normally even when smaller airlines are forced to cut back or even shut down.
The key date for investors to watch is April 2027, when Ryanair’s hedge deals run out.
If oil prices drop before then, Ryanair raising ticket prices could boost the company’s profits. If oil prices stay high until then, some weaker airlines may fold, which could leave Ryanair as the biggest player in the European market.
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