Airfare increases are becoming increasingly likely as the US-Iran war continues to unsettle energy markets, with major airlines warning that higher fuel costs could push ticket prices up further next year.
Lufthansa said on Tuesday that its fuel bill for 2026 is expected to reach €9.3 billion, around €2 billion more than last year and €600 million above its previous estimate.
Meanwhile, Ryanair chief executive Michael O’Leary has warned that fares could rise by as much as 20% next year.
European airlines have increasingly highlighted the impact of higher jet fuel prices on their finances, warning that further fare increases may be unavoidable unless there is a positive development in the conflict.
Fares are also expected to face additional pressure as airlines’ fuel-hedging contracts, which help protect them against price fluctuations, gradually expire, according to Reuters.
Higher costs could be passed on to passengers
Maria Kouroupi, director of aviation development and communications at Hermes Airports, told Sigma on Tuesday that airfares were determined by supply, demand and competition.
However, she said higher operating costs for airlines could gradually lead to part of the additional burden being passed on to passengers.
So far, the market’s performance appears to have absorbed some of the pressure, as air travel across Europe continues to grow, she added.
Passengers facing higher fares are increasingly searching for cheaper alternatives. Some are even willing to take connecting flights, changing planes up to twice to reach their destinations.
Airfares have already climbed
Ticket prices have already increased significantly, with some categories recording rises of more than 39% compared with May 2025 and nearly 50% compared with the beginning of 2024.
A recent analysis by aviation data company Cirium found that low-cost airlines had recorded the largest increases in economy-class fares since the war began.
Their fares were 39.20% higher than in May 2025 and had more than doubled since the start of 2024.
For Europe’s three major airline groups – Lufthansa, IAG and Air France-KLM – fares were 48.41% higher than at the beginning of 2024.
Why fuel prices matter to airlines
US and Israeli strikes on Iran began around the end of February. Despite initial expectations that the conflict would last only a few weeks, it has continued for around eight months, keeping international oil markets unsettled.
Fuel is one of the largest expenses for airlines, accounting for around 25% to 30% of their total operating costs. During energy crises, that share can rise to between 31% and 35%.
Sustained increases in jet fuel prices therefore place significant pressure on airline finances, increasing the likelihood that carriers will seek to recover at least part of the additional cost through higher ticket prices.
Also read: Cyprus tourism suffers bigger blow from war than Greece
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