Ryanair boss suggests ticket prices to increase by up to 20% by next summer

Ryanair boss Michael O’Leary said air fares could rise up to 20% next year if jet-fuel prices remain at their current level. 

This comes shortly after Ryanair said it would not introduce a fuel surcharge, while saying that some other airlines would have to. 

“Ryanair will not levy a fuel surcharge, but the legacy guys certainly will next summer,” Mr O’Leary is quoted as saying to Reuters last week.

Now, in an interview with the Financial Times, Mr O’Leary said that the price of jet fuel, which has almost doubled during the conflict in Iran, “may well be the norm for the next six to 12 months.” 

Based on this prediction, he said that airlines would struggle to absorb the higher costs. “None of our competitors are well hedged either,” he said, adding that this was why the industry was looking at fuel surcharges and higher fares next summer. 

On its side, Ryanair has already taken steps to limit its exposure to higher fuel prices.

It reduced its forecast for passenger numbers in the financial year ending March 2027 from 216 million to 214 million, citing its exposure to unhedged winter oil prices.

The airline will reduce its capacity during the winter season. This will include removing some Tuesday and Wednesday flights, as well as Saturday afternoon and early Sunday morning services in November and December and in mid-January, states the Financial Times.

The airline has historically hedged about 80% of its fuel requirements a year in advance, but at the moment it only hedged about 40%. 

“We’ve made the decision to not hedge aggressively into next year because we think current prices are too high,” he said. “But we may call that wrong.”

What could happen to fares?

Mr O’Leary's 10 to 20% estimate is based on the possibility that current jet-fuel prices remain at the same levels.

He also gave a longer-term scenario, saying that if jet fuel remained at $140 a barrel for five years, the average air fare could rise from about €50 today to €80-90 over the following six to eight years.

“There is no doubt in my mind, we’re underpricing air travel in Europe,” he said.

The European Commission said in September that there was no immediate oil supply problem in the EU, although it warned that developments in the Middle East and seasonal demand could tighten fuel markets in the months ahead.