Add StudioX as a preferred source on GoogleRyanair says airfares will be “materially higher” next summer because of a sharp rise in fuel costs linked to the US-Israel war with Iran, according to BBC Business. The airline is also considering a temporary wage freeze for staff.
The company expects fuel prices to stay high well into 2027 unless the conflict is resolved quickly.
Fares set to rise by double digits
Ryanair forecasts its fuel bill will be €2 billion (£1.6 billion) higher in the short term. Chief executive Michael O’Leary said fares would have to rise by double digits to help cover the extra cost.
Earlier this year, O’Leary said the airline would need a 20% fare increase to offset jet fuel costs. He now says he is not sure fares will reach that level. He added that the company is certainly looking at double-digit increases across Europe from all airlines in 2027.
Aviation fuel prices have surged this year because the war has sharply reduced the supply of refined products from the Gulf. That has also increased competition for fuel produced elsewhere.
In the six months to the end of September, Ryanair’s pre-tax profit fell 16% to €2.4 billion. The airline blamed mainly a 15% jump in fuel costs. About 80% of its fuel bill was hedged, meaning it was bought in advance at fixed prices, but the cost of the remaining 20% was elevated.
Pay freeze and slower hiring
Ryanair said higher fares alone are unlikely to cover the added costs, so it is weighing a pay freeze. It said multi-year wage deals with unions are coming to an end, and a freeze could take effect from April next year.
The company also plans to slow hiring and make greater use of artificial intelligence in its back-office and support functions.
Unite, the union representing Ryanair staff, said it has not been told of any such proposals. Oliver Richardson, the union’s national officer, said a multi-year pay deal already covers next year, and that a number of unions across Europe have the same arrangement.
He said the pay agreement was not tied to company performance, something he said Ryanair had stressed. The union therefore expects it to be honoured.
Fewer flights ahead
Ryanair has already trimmed its winter schedule and said on Monday that more cuts are coming. It said the reductions are happening across the airline industry, especially among short-haul carriers.
O’Leary said he expects the cuts to continue into the summer of 2027. Over the medium term, he said, short-haul capacity is likely to remain constrained until the early 2030s.
Source: BBC Business
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