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Ryanair is contemplating a temporary halt on wage increases for its employees as a response to the steep rise in fuel expenses triggered by the ongoing conflict involving the US, Israel, and Iran. The airline indicated that fuel prices are expected to stay elevated “well into 2027” unless the situation in the Middle East sees a rapid resolution.
The company anticipates a short-term increase in its fuel costs by approximately €2 billion (£1.6 billion) and predicts that ticket prices across Europe will rise as a means of offsetting these higher expenses. However, Ryanair has acknowledged that fare adjustments alone might not suffice, prompting the exploration of additional strategies, such as enforcing “temporary pay freezes.” The union representing Ryanair’s workforce, Unite, has been approached for comment but has yet to respond.
During the six months ending in September, Ryanair reported a 16% decline in pre-tax profits, down to €2.4 billion, primarily due to a 15% increase in fuel costs. Although 80% of its fuel requirements were “hedged” at fixed rates, the price for the remaining portion has effectively doubled. The surge in jet fuel prices this year is closely linked to the Middle Eastern war, which has severely disrupted the supply of refined products from the Gulf while increasing demand for alternatives elsewhere.
Ryanair’s CEO, Michael O’Leary, previously forecasted that airlines would likely raise fares by 15% to 20% next year. He remarked, “You’re going to see the biggest increase in airfares, I would say, in history in Europe in the next 12 months.” Yet, he expressed doubt that these fare hikes would fully compensate for the sharply higher oil expenses, saying, “The question is, will that increase in airfares be enough to cover the dramatically higher oil bills? I don’t think it will be.” Alongside pay freeze considerations, Ryanair is also planning to boost its use of artificial intelligence in administrative and support roles as existing multi-year wage agreements with unions near expiration
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