European air fares could climb by as much as 20 per cent next year, Ryanair chief executive Michael O’Leary said on Tuesday, blaming the war in the Middle East for pushing up oil prices that airlines will pass on to passengers.

“You’re going to see the biggest increase in airfares, I would say, in history in Europe in the next 12 months,” O’Leary said at a press conference in Brussels. “The question is, will that increase in airfares be enough to cover the dramatically higher oil bills? I don’t think it will be.”

He warned that airline margins will tighten because even steeper fuel surcharges will not cover the higher oil bill. Most European carriers, Ryanair included, have little protection against rising prices. “We’re 85 per cent unhedged next year, and most of the other European airlines are in a similar position,” he said.

There is also less capacity in the market as some airlines struggle, while higher taxes add to the strain. O’Leary used the conference to attack regulation in France and Belgium, where Ryanair will cut its presence in response to higher taxes and he repeated that the European aviation industry will keep consolidating as weaker players fail to survive in a high-cost environment.

Air Baltic and Spain’s Volotea are the latest European carriers to restructure as costs climb. Last week Lufthansa beat Air France-KLM to a stake in Portugal’s state-owned TAP, while US private equity firm Apollo Global Management is laying out plans to take over EasyJet.

Jet fuel costs have soared since the Iran war began in late February. Ryanair’s July earnings showed the conflict had hit profit and prompted later bookings amid concern over jet-fuel supply.

Ryanair fell as much as 2.2 per cent in morning trading in Dublin, taking its decline to about 25 per cent for the year, which at that rate would be its worst annual stock return since 2018.

O’Leary separately said he aims to receive the first of the carrier’s Boeing Max 10 aircraft in January, with about 16 more expected through April.