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Ryanair is weighing a temporary wage freeze for employees and warned that airfares will increase significantly next summer due to soaring fuel expenses. The airline reported that its fuel bill is projected to climb by €2bn in the short term, driven by supply restrictions stemming from the conflict involving the US, Israel, and Iran.
Profit Drop and Surging Fuel Costs
According to BBC News, Ryanair revealed that its pre-tax profits dropped 16% to €2.4bn during the six-month period ending in September, primarily caused by a 15% jump in fuel expenditures. While 80% of the airline’s fuel had been purchased in advance at fixed prices, the remaining unhedged portion faced steep price hikes.
Aviation fuel prices have climbed sharply this year because the conflict has drastically lowered the supply of refined petroleum products from the Gulf region while intensifying competition for supplies from alternative sources. Chief Executive Michael O’Leary stated that the company previously projected a need for a 20% fare increase to absorb the jet fuel expenses.
O’Leary explained that while a 20% increase might not materialize, European travelers should certainly expect double-digit fare hikes across all airlines in 2027. He added that the airline anticipates high fuel prices to persist well into 2027 unless a quick resolution to the conflict occurs.
Potential Pay Freezes and Union Response
Beyond raising ticket prices, Ryanair indicated it is evaluating a temporary pay freeze for staff as existing multi-year wage agreements expire, with potential implementation starting in April next year. The carrier also announced plans to slow down recruitment as part of cost-control measures.
Oliver Richardson, a national officer at the Unite union, told BBC News that the organization has not received any notification regarding such proposals. Richardson emphasized that the union maintains multi-year pay agreements covering next year for its members at Ryanair and across various European unions.
Richardson noted that the wage agreements were never linked to or dependent on corporate financial performance, pointing out that Ryanair itself had emphasized this distinction previously. He stated that the union therefore expects the existing pay deals to be fully honored.
Capacity Cuts and Technological Shifts
In response to the rising financial pressures, Ryanair has already reduced its winter flight schedule and noted that further capacity cuts are approaching across the wider aviation industry, particularly for short-haul operators. O’Leary stated that these reductions will extend into the summer of 2027 and that short-haul capacity will likely remain constrained until the early 2030s.
As part of its broader operational adjustments, Ryanair also stated it will expand its implementation of artificial intelligence within its back-office and support operations.
