Ryanair CEO Rules Out Fuel Surcharge Despite Rising Jet Fuel Prices, Warns Rivals Could Raise Fares by 20%

Ryanair CEO Michael O’Leary said the budget airline will not impose fuel surcharges on passengers despite soaring jet fuel prices, even as he warned that competing European carriers could raise fares by as much as 20% next summer and that more airlines could collapse under mounting financial pressure.

Speaking to reporters on Wednesday, O’Leary said Ryanair is in a strong position to withstand higher fuel costs and predicted that the industry’s ability to absorb the impact of elevated oil prices would deteriorate significantly in 2027. “Ryanair will not levy a fuel surcharge, but the legacy guys certainly will next summer,” O’Leary said.

European airlines are grappling with rising operating expenses, reduced capacity and growing financial uncertainty. Higher jet fuel prices have put particular pressure on carriers with limited protection against fluctuations in energy markets, raising concerns about additional bankruptcies and accelerating consolidation across the industry.

Ryanair has already adjusted its growth expectations in response to the fuel price surge. Earlier this month, the airline lowered its passenger forecast for fiscal 2027 from 216 million to 214 million, reflecting planned capacity restrictions intended to limit its exposure to fuel purchased at current market prices.

Although Ryanair has hedged most of its fuel requirements, protecting it from some of the volatility in energy markets, a small portion remains unhedged. That exposure has prompted the airline to scale back some planned operations rather than maintain its previous passenger growth target.

“Most of the airlines were well hedged into the summer of 2026, and therefore we absorb the kind of shock of the much higher oil prices this summer,” O’Leary told reporters. “None of us will be able to absorb those much higher oil prices next year … and it will get passed on in the form of fuel surcharges on higher airfares,” he added.

Fuel hedging allows airlines to lock in prices for future purchases, shielding them from sudden increases in oil prices. However, those arrangements eventually expire, leaving carriers exposed to higher costs when they negotiate new contracts. O’Leary said the protection many airlines enjoyed this summer would not necessarily extend into next year, when carriers could face substantially higher fuel bills.

O’Leary said Ryanair was already holding discussions with airports worried about losing flights and passenger traffic if additional airlines cease operations. He also made clear that he sees the crisis as an opportunity for Ryanair to strengthen its competitive position. “I very much hope that jet (fuel) prices will rise faster into next year because that will accelerate the extent to which other airlines will fail,” O’Leary said.

He predicted that loss-making airlines would be particularly vulnerable and that sustained high fuel prices would accelerate consolidation in European aviation, eventually concentrating much of the market around British Airways, Lufthansa, Air France and Ryanair. “Airlines who are currently loss-making will fail,” he said. “It will accelerate the consolidation of Europe into four large airlines: BA (British Airways), Lufthansa, Air France and Ryanair.”