Ryanair may ‘freeze pay’ and ‘increase airfares’ in 2027 in attempt to offset rising fuel costs

The airline expects fuel prices to “remain elevated well into 2027”.

The airline expects fuel prices to “remain elevated well into 2027” as a result of the conflict in the Middle East, predicting a €2 billion increase in its fuel bill.

Currently, Michael O’Leary’s company has approximately 80% of its jet fuel hedged at prices lower thna the market rate, however as the financial year ends, this is also set to die out.

One way the budget airline expects to offset the higher fuel costs is to increase fares for European short-haul flights, but this alone will likely not cover the increase.

Ryanair is reviewing all costs, focusing on areas like labour agreements, temporary pay freezes, and lower crew ratios.

Also being reviewed is the “increased use of AI to drive further operational and back-office and support functions productivity”.

These changes come as the company revealed its profit after tax fell to €2.15 billion (15%) for the later half of the year compared with a year earlier.

The airline’s revenues increased by 3% as a result of passenger numbers climbing by 6%, however operating costs also increased by 10% to €7.69 billion.

The company announced it would cut its traffic target for the year down to 214 million from 216 million passengers in an attempt to cover fuel increases.

Ryanair CEO Michael O’Leary commented: “While third-quarter demand is strong, with fares trending modestly ahead of the same quarter last year, the booking window remains closer-in which reduces visibility.

“The third-quarter’s fare outcome will heavily depend on the strength of close-in October/November school mid-term and Christmas bookings.

“As is normal at this time of year, we have zero Q4 visibility. It therefore remains too early to provide meaningful full-year 2027 profit-after-tax guidance.”