Ryanair CEO Michael O'Leary told CNBC Monday that European airfares are set to rise "significantly," growing by as much as 20% next year as fuel hedges expire

The budget air carrier's profit fell 15% to 2.15 billion euros ($2.3 billion) in the first fiscal half of the year, as the price of its 20% unhedged jet fuel doubled. "So we're facing 2027 where we have much higher oil prices... I think they're going to get passed on in significantly higher airfares," O'Leary told CNBC's Steve Sedgwick on Monday. "The market customers have been insulated for the last 12 months... but those hedges are rolling off. There's still no resolution in the Middle East. Jet oil today is $170 a barrel. I mean, this is a very significant cost cliff we're all facing next year. I believe you're going to see airfares rise next year across Europe by 10%, maybe even 20%," O'Leary added.