Ryanair considers freezing workers' pay amid rising fuel costs
What's the story
Ireland-based low-cost airline Ryanair is mulling a temporary wage freeze for its employees and has confirmed that airfares will be "materially higher" next summer. The airline's decision comes in the wake of a sharp rise in fuel costs, triggered by the ongoing US-Israel war with Iran. Ryanair expects these high fuel prices to persist well into 2027 unless there is a quick resolution to the conflict.
Financial impact
'Temporary pay freezes' may be considered
Ryanair has predicted a €2 billion (£1.6 billion) spike in its fuel bill in the short term.
The airline's CEO, Michael O'Leary, said airfares would have to go up by "double-digits" to offset these costs.
However, he also hinted that this might not be enough and hinted at the possibility of "temporary pay freezes."
Profit decline
Pre-tax profits dropped by 16%
Ryanair's pre-tax profits have dropped by 16% to €2.4 billion in the six months ending September, mainly due to a 15% jump in fuel costs.
The airline said that while 80% of its fuel bill had been "hedged" (bought in advance at fixed prices), the cost of the remaining portion was high.
O'Leary reiterated earlier forecasts that Ryanair would need a 20% fare increase to cover jet fuel costs.
Market impact
Aviation fuel prices skyrocketed this year due to US-Israel war
The US-Israel war with Iran has caused aviation fuel prices to skyrocket this year. The conflict has severely curtailed the supply of refined products from the Gulf and intensified competition for those produced elsewhere.
Ryanair is also considering a pay freeze as "maturing labor agreements" come to an end, with the policy potentially coming into effect from April next year.
Operational adjustments
Ryanair has scaled back on winter flights
Ryanair has scaled back on winter flights and plans to do more. This trend is being seen across the airline industry, especially with short-haul carriers.
O'Leary said he expects these cuts to continue into summer 2027. "Over the medium term, we expect short-haul capacity will remain constrained out to the early 2030s," he added.