European airlines are facing a sharp rise in jet fuel costs that could push ticket prices significantly higher from 2027, as carriers warn that a combination of soaring fuel prices, shrinking hedging protection and weaker demand could put further pressure on their finances.
The price of jet fuel in Europe has risen to more than $1,600 a tonne, according to Argus data cited by Corriere della Sera. That is about 120% higher than a year ago and only slightly below the peak reached in May.
Fuel costs already account for as much as half of operating expenses for some airlines, increasing pressure on carriers as they prepare for the less profitable winter season.
Fuel hedging protection is running out
One of the biggest concerns for airlines is the sharp decline in fuel hedging coverage from early 2027.
Carriers have traditionally used fuel hedging to protect themselves against sudden price increases. But with current prices so high, some airlines are reluctant to lock in future supplies at today’s levels.
Ryanair, for example, has hedged 80% of its jet fuel requirements for the April 2026-March 2027 period at $668 a tonne. The remaining 20% is already costing more than twice that amount.
From April 2027, however, the airline’s hedged coverage could fall to around 15%. If fuel prices remain at current levels and consumption remains unchanged, Ryanair’s annual fuel bill could more than double to above €10 billion, according to calculations cited by Corriere.
The airline has already announced plans to cut around 10,000 flights during the coming winter season and warned that higher fuel costs could feed into ticket prices. ITA Airways has also warned of higher fares from January as its fuel-price protection falls to around 20%.
Europe faces supply risks
The European Commission’s oil coordination group says there is currently no supply shortage, pointing to higher refinery output in Europe, alternative global supplies and sufficient commercial and emergency stocks.
However, analysts warn that geopolitical developments could tighten the market in the coming months.
Energy consultancy Energy Aspects expects Europe to face a jet fuel deficit of around 510,000 barrels per day in the fourth quarter of 2026, while the US and Asia-Pacific regions are forecast to record surpluses.
Jet fuel stocks at the Amsterdam-Rotterdam-Antwerp refining and storage hub have also fallen to their lowest level in seven years.
Italy’s supply situation is currently more stable. The country had around 220,700 tonnes of jet fuel stocks on 19 September, with additional strategic reserves of almost 57,000 tonnes. Imports from India, Saudi Arabia and Nigeria also increased during the summer.
Geopolitical tensions add to pressure
The disruption of major oil flows is adding another layer of uncertainty.
Traffic through the Strait of Hormuz remains severely constrained, while Russia has restricted diesel exports following attacks on its oil infrastructure. Saudi Arabia has continued supplying aviation fuel to Europe, but analysts warn that any damage to refineries or terminals along the Red Sea could affect those flows.
Argus analysts say traders do not currently expect jet fuel prices to return to pre-war levels during the winter.
For airlines, that leaves limited room to absorb further increases without cutting margins, reducing capacity or raising fares.
Airfares could rise sharply
Airlines are already assessing how much of the higher fuel bill can be passed on to passengers.
In an extreme scenario, where fuel prices remain high and airlines pass most of the additional cost to consumers, average ticket prices could rise by around 80%, with increases of up to 100% on some routes, according to calculations cited by Corriere.
Airlines are unlikely to absorb the entire increase, however. Instead, carriers could reduce frequencies or abandon less profitable routes, particularly during the winter months.
The combination of higher fuel costs, limited hedging protection and weaker demand could therefore reshape airline networks and pricing from 2027, with the scale of the impact depending largely on how fuel markets and geopolitical tensions develop over the coming months.
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