Don’t panic-book 2027 holiday despite record price ‘hike’ warning

Aussies shouldn’t rush to book flights for next year despite a dramatic warning by an airline giant that the “biggest airfare hike in history” is coming.

Ryanair CEO Michael O’Leary issued the ominous alert, saying: “You’re going to see airfares rise next year in Europe, I think by 10, 15, maybe 20 per cent.”

“You’re going to see ⁠the biggest increase in airfares, I would say, in history in Europe for the next 12 ​months.”

O’Leary waned of the chilling price rises, which he blames on the fuel prices hit by the Middle East war, at a conference, The Guardian reported.

However, Aussie travel experts say that while prices have been hit already by the war and could rise more, there’s going to be a tipping point.

“Should the disruption continue in the Middle East, there is still upward movement in fares that we are yet to see,” Justin Brownjohn, senior manager at the RMIT Aviation Academy, told nine.com.au.

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“Demand has generally remained strong throughout the industry, but it is likely this will start to wane if large increases to the level Mr O’Leary is suggesting, come to fruition.

“A 20 per cent increase on the average $2300 fare currently available in the market for next summer to Europe is quite the ask for people already managing other cost of living constraints.

“Airlines are being squeezed at the moment and will need to recoup some of these costs somehow and a key method to that will be maintaining fares higher on the back of lower fuel prices.

“However, at some point the demand side of the equation will take over, and if forward bookings are not strong, airlines will start discounting.”

He reckons travellers should hold off booking to see what happens in the coming months.

“While a resolution in the Middle East does not immediately equate to a reduction in fares, the longer fuel prices remain elevated, the longer airlines will keep them raised regardless of what the fuel price does,” he said.

“We won’t see rock bottom prices, but it could be better than what we currently see.”

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Christian Hunter, chair of the Australia Travel Industry Association (AITA), said it’s hard to tell how what may happen in Europe will hit Australian holidaymakers.

“There’s no doubt fuel prices are driving higher airfares,” he told nine.com.au.

“Jet fuel is one of the biggest costs an airline carries, so when it climbs, fares follow, and that’s being felt right across the industry.

“What we can’t do is put a number on it for Australian travellers because what you pay will come down to the airline, the route and when you travel.”

Aussies are taking different approaches to next year’s holiday.

“Some clients are planning and locking in flights earlier. Others are waiting to see what happens closer to their travel date and staying flexible on where they go,” he said.

O’Leary said Ryanair and many other European airlines had set prices ahead – known as hedging – to stabilise fuel costs.

But the boss of Europe’s largest airline said most European carriers, including Ryanair, do not have significant hedging in place from April 2027 onwards to protect them if oil prices remain high.