Ryanair CEO Michael O'Leary has warned that Europe faces the "biggest increase in airfares in history" as the conflict in the Middle East continues to drive up costs. The budget airline boss said his company and others could be forced to hike fares by as much as 20% as kerosene prices continue to rise into 2028.
O'Leary's warning on rising costs
He said: "You're going to see the biggest increase in airfares, I would say, in history in Europe in the next 12 months. The question is, will that increase in airfares be enough to cover the dramatically higher oil bills? I don't think it will be... Most of the other European airlines are in a similar position."
Ryanair's share price fell by around 2% in the immediate aftermath of his comments. The airline is expected to carry two million fewer passengers this financial year after reducing its capacity. This is expected to reduce its fuel consumption by as much as £84 million, but even if the Iran war ended tomorrow, Mr O'Leary said airlines are "facing an enormous cost challenge".
Criticism of government policies
The Ryanair boss also urged Andy Burnham to make "everyday fixes" by cutting air passenger duty and dropping plans to let mayors bring in a tourism levy. He accused the Prime Minister and his Transport Secretary, Heidi Alexander, of "everyday spin", with a proposal to block airlines from charging parents extra to sit with their children on planes.
Mr Burnham and Ms Alexander have also announced plans to stop airlines from charging passengers to amend the name on their flight bookings if they need to correct a typo. The Prime Minister said: "People are fed up with these little charges that add up, so I'm putting a stop to them. This is what our everyday fixes are all about – giving people room to breathe by tackling the small irritations that catch people out, waste their time and cost them money."
Air passenger duty increase
Mr O'Leary said UK airlines already seat families together without a charge and allow passengers to make small changes to their personal details before departure, fee-free. He said: "Today's vacuous PR by transport minister Heidi Alexander is typical political spin. She's pretending to do something while in reality doing nothing."
Mr O'Leary added, "Her press release is designed to cover over the damage that this Labour Government has inflicted on UK air travel" by the decision to raise air passenger duty in April this year. The tax went from £13 per head to £15 for most passengers in economy seating on short-haul flights leaving the UK. This amounts to "£60 for a family of four", Mr O'Leary said.
