Ryanair is reviewing cost-cutting measures, including potential pay freezes and reduced crew numbers on flights, to counter a projected €2bn increase in jet fuel costs. The airline expects the surge in fuel prices, driven by the conflict in the Middle East, to persist well into 2027. The company also plans to increase the use of artificial intelligence to improve productivity in back-office, support, and operational functions.
Chief Executive Michael O’Leary said, “Unless there is a swift resolution of the Middle East conflict we expect jet fuel prices to remain elevated well into 2027.” O’Leary noted that while European short-haul fares are expected to increase materially to reflect higher fuel prices and competitor capacity reductions, these increases are unlikely to fully offset the estimated €2bn rise in the company's fuel bill.
Ryanair reported that 80% of its fuel requirements through the end of March are hedged at $67 a barrel, while 25% of requirements for the following 12 months are hedged at $95 a barrel. The airline anticipates that European airfare prices could rise by as much as 20% next year as fuel hedging deals expire.
In the quarter ending in September, Ryanair reported a post-tax profit of €1.61bn, representing a 6% year-on-year decrease that aligned with analyst expectations. Passenger numbers during that period grew 5% year-on-year to 64.5 million. Average fares fell by 2% year-on-year in that quarter, though the company stated that fares in the final three months of the year are trending modestly ahead of the same period last year.
The airline noted that the booking window remains closer-in, which reduces visibility for future fare outcomes. The company said the outcome for the current quarter will depend heavily on the strength of Christmas and October-November school midterm holiday bookings.
