Ryanair may freeze pay and raise fares as fuel costs soar

Ryanair has confirmed that airfares will be “materially higher” next summer, driven by a sharp rise in fuel costs following the US-Israel war with Iran. The budget carrier expects fuel prices to remain elevated “well into 2027” unless there is a swift resolution to the conflict. Its fuel bill is forecast to be €2bn (£1.6bn) higher in the short term.

Boss Michael O’Leary said fares would have to rise by “double-digits” to help cover the cost, but added that was unlikely to be enough. The company is now looking into freezing staff pay as multi-year wage deals with unions come to an end. A policy could be implemented from April next year.

Unite, which represents Ryanair staff, said it had not been told of any such proposals. Oliver Richardson, a national officer at the union, pointed out that a multi-year pay deal covering next year is already in place. He stressed that the agreement is not dependent on company performance and that Ryanair should honour it.

Pre-tax profits fell 16% to €2.4bn in the six months to the end of September, while fuel costs jumped 15%. Ryanair has hedged 80% of its fuel bill, but the remaining unhedged portion is now much more expensive. O’Leary reiterated earlier forecasts that a 20% fare increase would be needed to cover jet fuel costs, though he admitted, “I’m not sure we’ll get to 20%.”

Still, he expects “double-digit fare increases across Europe from all airlines in 2027.” Ryanair is also slowing hiring and increasing the use of artificial intelligence in back office functions. The airline has already cut winter flights and says more reductions are coming. O’Leary believes those cuts will continue into summer 2027, with short-haul capacity constrained into the early 2030s.