Ryanair is preparing for a difficult stretch as higher jet-fuel costs push the airline toward fare increases, slower hiring, and possible pay freezes. The company expects European short-haul fares to “increase materially” next year, but Michael O’Leary said higher ticket prices may not cover the full rise in the airline’s fuel bill.
Ryanair forecasts that its jet-fuel costs will rise by about €2bn (£1.6bn) in the financial year ending in March 2028. O’Leary said fuel prices could remain elevated well into 2027 unless there is a “swift resolution” of the Middle East conflict. Oil prices reached a six-month high on Friday before falling to about $106 a barrel on Monday.
Higher fares may not cover the fuel shock
The airline expects European carriers to raise ticket prices by up to 20% as fuel costs feed through to passengers. O’Leary said Ryanair may “need a 20% fare increase” to cover the cost of jet fuel, although he added, “I’m not sure we’ll get to 20%.” He said the airline was still looking at “double-digit fare increases across Europe from all airlines in 2027.”
Ryanair said European short-haul fares will rise to reflect higher fuel prices and reductions in competitor capacity. Even so, it expects those increases to fall short of the €2bn rise in its fuel bill. “I don’t believe higher fares will be enough,” O’Leary said, adding that the airline would also take out airport and aircraft costs.
The timing creates a challenge for Ryanair because its fuel protection will not last forever. The airline has hedged 80% of its fuel requirements until the end of March at $67 a barrel, while 25% of its requirements for the following 12 months are hedged at $95 a barrel. As those deals expire, more of the company’s costs will reflect market prices.
Ryanair’s fares fell by 2% year on year in the quarter ending in September. The airline said fares in the final three months of the year were trending “modestly ahead” of the same period last year, but the booking window remains “closer-in,” which reduces visibility. The current quarter will depend heavily on October-November school midterm and Christmas bookings.
Pay talks could bring a clash with unions
To manage the pressure, Ryanair is reviewing costs across its airline group. The list includes airport negotiations, labour agreements coming up for renewal, lower crew ratios, and greater use of AI in operational, back-office, and support functions. The airline is considering temporary pay freezes, with some agreements due for renegotiation from March and a policy possibly starting in April next year.
Ryanair also said it was “slowing down hiring meaningfully” for new pilots, cabin crew, and training courses. It is considering reducing crew numbers on flights, while the use of AI would focus on improving productivity. O’Leary said AI had already helped increase capacity by 4%.
He linked that use of technology to the size of the airline, which is running 650 aircraft. “When you’re running 650 aircraft, it’s too big for a human to be able to do it,” O’Leary said. He added that machines can design schedules better, allowing Ryanair to get more productivity from its aircraft.
The possible pay freeze has already drawn a response from Unite, which represents Ryanair staff. Oliver Richardson said Unite “hasn’t been advised of any such proposals” and has a multiyear pay deal covering 2027. He said the agreement was not attached to or dependent on company performance, adding, “As such we would expect it to be honoured.”
Richardson also said a number of unions across Europe have similar agreements. That leaves Ryanair facing a potential dispute if it tries to reduce labour costs through temporary freezes while existing deals remain in place.
Capacity cuts may last beyond the next summer
Ryanair has already cut back on winter flights and said more reductions will follow across the airline industry, particularly among short-haul carriers. O’Leary said the company expects those cuts to continue into the summer of 2027, with short-haul capacity remaining constrained into the early 2030s.
That reduced capacity could help airlines support higher fares, but it also gives travellers fewer low-cost options. Ryanair’s own traffic target was cut earlier in the year from 216 million passengers to 214 million, adding to the pressure on its plans.
The airline’s financial results show why management is looking for savings. Ryanair reported a post-tax profit of €1.61bn in the quarter ending in September, down 6% year on year and in line with analyst expectations. For the six months to the end of September, profit after tax fell by 15% to €2.15bn (£1.79bn), while pre-tax profit fell by 16% to €2.4bn.
Revenue rose by 3% to €10.08bn (£8.41bn), helped by a 6% increase in passenger numbers. Operating costs also rose by 10% to €7.69bn (£6.42bn), while fuel costs jumped by 15%.
Ryanair says it has “zero Q4 visibility,” making it too early to provide meaningful full-year 2027 profit-after-tax guidance. For passengers, the message is clearer: higher fares are coming, while the airline tries to balance fuel costs, staffing agreements, capacity cuts, and a bigger role for AI.
Based on
- Ryanair faces clash with unions as it mulls pay freezes amid soaring fuel costs — theguardian.com
- Ryanair to review pay freezes and AI use to counter jet fuel price surge | The Independent — independent.co.uk
- Ryanair looks to AI to curb soaring jet fuel costs | The Independent — independent.co.uk
- Ryanair says it may freeze workers’ pay and raise airfares — bbc.com
