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Flying around Europe could get considerably more expensive next year, even on budget airlines.

Ryanair, Europe’s largest airline by passenger numbers, is warning that airfares could rise by as much as 20% in 2027 as soaring fuel prices put pressure on the carrier’s bottom line. And higher ticket prices might not be enough to cover the difference.

The Irish budget airline said Monday that it is considering temporary employee pay freezes, reduced crew staffing ratios, and increased use of AI to help offset rising expenses, Reuters reports.

Ryanair says it expects its annual fuel cost to increase by approximately $2.2 billion during its fiscal year ending in March 2028, in large part due to higher oil prices tied to the ongoing conflict in the Middle East.

“Unless there is a swift resolution of the Middle East conflict, we expect jet fuel prices to remain elevated well into 2027,” Ryanair CEO Michael O’Leary said in the company’s earnings announcement.

Like many airlines, Ryanair uses fuel hedging agreements to lock in prices in advance, protecting itself from sudden increases in oil costs.

Currently, approximately 80% of its fuel requirements through March 2027 are hedged at $67 per barrel. But for the following 12 months, just 25% of its fuel needs are covered, at an average price of $95 per barrel.

That leaves the airline increasingly exposed to higher market prices. O’Leary says he expects European airfares to rise by double digits next year, potentially reaching 20%, as airlines pass some of those costs along to travelers.

For some perspective, U.S. airfare prices rose more than 20% between January and September of this year, as airlines passed along higher fuel costs to passengers. But even those increases may not be enough to keep airlines afloat.

Ryanair is reportedly reviewing its expenses, including airport agreements and employee compensation, to cut costs. The company is also exploring ways to reduce crew ratios and use AI to improve productivity in administrative and support operations.

The warning comes as Ryanair reported a 15% decline in after-tax profit for the six months ending in September, falling to $2.4 billion, despite carrying 6% more passengers.

For travelers, Europe’s famously cheap flights may become harder to find next year. And with rising fuel prices affecting airlines worldwide, Ryanair is unlikely to be the only carrier charging more.

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