Ryanair looks to freeze wages, hike fares as fuel prices soar

Irish budget airline Ryanair announced plans to freeze wages and raise fares next year, amid soaring jet fuel prices due to the Middle East conflict. The airline expects its fuel bill to increase by €2.0bn ($2.24bn) in the coming financial year, which could lead to cost-cutting measures like temporary pay freezes, reduced cabin crew ratios, and increased use of artificial intelligence in back-office operations.

CEO Michael O'Leary stated that unless the Middle East conflict is resolved, Ryanair anticipates jet-fuel prices to remain elevated through 2027. The carrier currently hedges 80% of its fuel needs at around $67 a barrel, but only a quarter of its 2027-2028 needs are hedged at a higher price of $95 a barrel. Ryanair's profit after tax fell six percent to €1.61bn in the second quarter, while passenger traffic grew five percent.

Fares, however, fell two percent due to consumer hesitancy and later bookings, driven by the war. O'Leary hinted that fares may rise next year as fuel costs increase, predicting "double-digit percentage" fare hikes across Europe in 2027. The airline expects to carry 214 million passengers in the current fiscal year, a 3% increase from 2025/26.

O'Leary noted that it is too early to provide full-year profit guidance, as the situation remains highly sensitive to Middle East and Ukraine fuel prices, macroeconomic shocks, and European air traffic control strikes.