Airfare Outlook Points to Steep Increases
Ryanair expects much higher prices on short-haul flights in 2027 if oil costs stay high. The airline has cut its 2027 passenger goal from 216 million to 214 million because of costly unhedged fuel, while still planning to expand summer services.
As Europe's biggest budget carrier, Ryanair also cautions that some competitors may find it hard to preserve capacity or make it through the winter if oil prices remain elevated. Jet fuel currently costs about $156 per barrel on average, up 74.2% from a year earlier; month over month, the International Air Transport Association (IATA) puts the increase at 8.2%.
Pressures Building for Airlines
Ryanair has hedged roughly 80% of its 2027 jet fuel at $67 per barrel. Even after lowering the annual passenger target, it expects summer traffic from April through October 2026 to rise more than 5%, hitting 145 million passengers.
The picture is complicated by a US- and Israeli-led military campaign against Iran that began on 28 February 2026. By April, some European airlines had cancelled flights due to fuel shortages, and new US strikes on Iran drove oil prices up once again. This deepens the challenges for carriers that were already hurting from elevated fuel bills.
Higher ticket prices and the scaled-back passenger forecast are signs of a turbulent stretch for the airline industry.
Oil prices that are being kept high by international conflicts could continue to weigh on airlines' bottom lines. Europe's largest discount airline, Ryanair, is trying to move forward with its growth plans, but it faces risks that could affect the whole industry.