Jet fuel is 50% more expensive as Ryanair warns of continued price pressures

Key Facts

Michael O’Leary, chief executive of Ryanair Group, said on October 8 that European airlines could face more than another year of high fuel costs and higher ticket prices because of the Iran war. He added that jet fuel is about 50% more expensive than before the war. He expected prices to remain at those levels over the next 12 to 18 months. His warning comes as many airlines enter 2027 with lower levels of hedging, he said. Higher costs could push ticket prices higher in the coming months, he said.

O’Leary estimated that ticket prices could rise by as much as 20% next summer as a result of higher costs. He said airlines cannot continue without passing higher fuel costs on to customers through higher fares. Customers will bear the increase, he added. In his view, this reflects a direct link between the cost of fuel and the prices airlines pay, and what may later show up in ticket prices. But his warning does not specify that all carriers will raise fares by the same amount.

Airlines’ ability to cope with higher fuel costs varies according to the size and duration of their hedges. Emirates said on September 15 that hedging protects it from about 50% of its exposure to rising jet fuel prices, while the other half remains exposed to the market. The company said in May that its hedges extend through fiscal year 2028-29. It also said it had secured enough supplies to support current operations and return to its pre-disruption operating capacity. This extended horizon offers a contrast with airlines entering 2027 with less coverage, according to O’Leary’s warning.

Across the industry, the International Air Transport Association said airlines globally had hedged about a third of expected fuel consumption for 2026. Hedging protects against short-term cost volatility, but does not eliminate exposure to a sustained rise in prices. The association forecast an average jet fuel price of 152 dollars a barrel in 2026, up nearly 70% from 2025, and an average premium over Brent crude of 57 dollars a barrel, a record level. It also forecast fuel consumption at 104 billion gallons, unchanged from 2025. Even so, fuel’s share of operating expenses rose to 31.4% in 2026, compared with 25.4% in 2025, as a result of higher prices.

Company data show differences in coverage even within the European airline sector. Wizz Air said it had hedged 83% of its jet fuel needs through March 2026, but coverage for the year ending in March 2027 stood at just 55%. Ryanair, by contrast, said in September that it had hedged 80% of its needs through March 2027, at about 67 dollars a barrel. The company also cut its passenger traffic target for fiscal year 2027 to reduce losses and exposure to unhedged fuel during the winter. It warned that some less-hedged competitors could struggle to maintain their operating capacity.

The global jet fuel price was about 99 dollars a barrel on February 27, a day before the war began, then topped 209 dollars in early April. The price fell for about three months before reaching 195 dollars a barrel in mid-September. In the United States, airlines cut some less-profitable flights and raised fares and baggage fees, according to the Associated Press. Major U.S. airlines said additional passenger revenue initially covered only part of the sharp increase in fuel costs. In May, Lufthansa maintained its 2026 profit outlook despite expecting a 1.7 billion euro increase in fuel costs, saying hedging, higher revenue and cost cuts would help offset the increase; its shares closed 6% higher.