Ryanair boss has 'no doubt' air fares will rise next year amid high oil prices

The boss of Ryanair said he has “no doubt” air fares will rise next year for summer holidaymakers amid the surging price of oil and the Iran war.

Earlier this month, oil prices rose above $100 a barrel for the first time since July after the latest round of strikes in the conflict.

Michael O’Leary, chief executive of Ryanair, told reporters in London that flight prices were “only going one way”, which is “significantly upward”.

The budget airline has already cut its air traffic target for next year on the back of efforts to use less unhedged fuel over the winter period.

Air fares are expected to rise next year. / Credit: PA

Speaking at a press conference on Wednesday, O’Leary said: “Fares for Ryanair passengers and every other passenger into the summer of 2027 are going to rise materially, I believe, because of significantly higher oil prices.

“I have no doubt fares are rising next year. The question is by how much.”

He added: “We’re essentially hedged this year at about 80 dollars a barrel. If we hedge next year at 100 dollars a barrel, our oil bill goes up by 25%.

“Our oil bill this year is six billion. If it goes up by 25%, that’s seven-and-a-half billion next year.”

The airline has previously warned that it believes some of its competitors will “struggle to maintain capacity or even survive” this winter if oil prices remain high.

According to the International Air Transport Association (IATA), the average global price of jet fuel rose 7.4% last week compared to the week before to 194.90 dollars per barrel.

O’Leary also hit out at Labour’s plans to introduce a tourist levy, saying holidaygoers already pay air passenger duty (APD).

Earlier this year, the government announced proposals to give regional leaders across large parts of England the power to introduce levies on overnight stays to help raise funds for their areas.

O’Leary said that if the plans went ahead, the airline would look at switching some operations to “zero-tax, lower-cost destinations elsewhere in Europe”.

He said: “We don’t have any great fundamental philosophical difference with his regional tax, where you allow the regional mayors to add a tax on hotel nights, but that is a double tax on tourism.

“Abolish APD. You can’t tax tourists on the way into the UK and then double tax them for the hotel night.”

Hospitality chiefs have previously warned they believe the uncapped proposals for the new tax could cost the UK hospitality and tourism industry up to £1.6 billion.

Meanwhile, APD rates, which are based on the length of the flight and the class of cabin, increased in April.

Passengers travelling in economy are currently charged £8 for a domestic flight and £15 for a short-haul flight, up to 2,000 miles.

Airlines have long called for APD – which is imposed on flights from most UK airports – to be reduced or cut, claiming this would lead to an increase in demand for travel.