Ryanair weighs pay freeze and warns of double-digit fare rises as fuel costs surge

Ryanair is considering a temporary wage freeze for staff and has confirmed that airfares will be materially higher next summer, citing a sharp rise in fuel costs following the US-Israel war with Iran. The airline said it expects fuel prices to remain high 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, and chief executive Michael O'Leary said fares would have to rise by double digits to help cover the cost. However, the company indicated that fare rises alone were unlikely to be enough, and it is now looking into freezing pay. Unite, the union representing Ryanair staff, said it had not been told of any such proposals. Oliver Richardson, national officer at Unite, said the union has a multi-year pay deal in place which covers next year, adding that a number of unions across Europe have the same. He stressed that the pay agreement was not attached to, nor dependent on, company performance, something Ryanair was at pains to emphasise during negotiations, and said the airline would be expected to honour it. The comments came as Ryanair reported a 16% fall in pre-tax profits to €2.4bn for the six months to the end of September, largely due to fuel costs jumping by 15%. The company said that although 80% of its fuel bill had been hedged, in effect bought in advance at fixed prices, the cost of the remainder was elevated. O'Leary reiterated forecasts from earlier this year that Ryanair would need a 20% fare increase to cover the cost of jet fuel. "I'm not sure we'll get to 20%," he said, "but we're certainly looking at double-digit fare increases across Europe from all airlines in 2027." Aviation fuel prices have surged this year as a result of the US-Israel war with Iran, which has dramatically reduced the supply of refined products coming from the Gulf and increased competition for those produced elsewhere. Ryanair said it was weighing up freezing pay as maturing labour agreements, multi-year wage deals with unions, come to an end, with the policy potentially implemented from April next year. O'Leary also said the company would slow down hiring as its costs rise. The airline has cut back on winter flights and said on Monday that further cuts were to come, adding that the trend was happening across the airline industry, particularly among short-haul carriers. "We believe those cuts will continue into the summer of 2027," O'Leary said. "Over the medium term, we expect short-haul capacity will remain constrained out to the early 2030s." Separately, Ryanair said it would increase its use of artificial intelligence within its back office and support functions.