Ryanair May Freeze Pay as Fuel Bill Rises and Profit Falls

Ryanair said on Monday it is reviewing all of its costs and may require staff to take temporary pay freezes, after higher fuel prices cut its profit in the July to September quarter.

The airline reported an after-tax profit of 1.61 billion euros for the quarter, down 6 percent from a year earlier. Ryanair said the result was in line with a company poll of analysts. The July to September quarter is the period in which the airline typically makes most of its profit, because it captures most of the northern hemisphere summer holiday season.

A fuel bill that rises faster than fares

Ryanair estimates that its fuel bill will increase by about 2 billion euros, or 2.24 billion dollars, in the financial year ending March 2028, based on current forward prices. The airline said a material rise in short-haul airfares next year is unlikely to fully offset that increase.

Chief executive Michael O'Leary set out the reason in a company statement quoted by Reuters: "Unless there is a swift resolution of the Middle East conflict, we expect jet fuel prices to remain elevated well into 2027."

The cost review goes beyond pay. Reuters reported that the measures under review also include negotiations with airports, lower crewing ratios and increased use of AI in back-office operations. The BBC reported that it had contacted Unite, the union representing Ryanair employees, for comment on the possible pay freeze.

Hedges cover this year, less of the next

Ryanair said its fuel needs through March 2027 remain 80 percent hedged at 67 dollars a barrel. Cover for the following 12 months is thinner. The airline said hedges for that period were nudged up to 25 percent at 95 dollars a barrel, compared with 15 percent at an average of 85 dollars a barrel at the end of June.

That gap is the core of the problem. Most of the fuel the airline will burn in the current financial year is already bought at the lower price. A much larger share of the fuel for the year after is exposed to whatever the market charges at the time.

Fares and the half year

Average fares fell 2 percent year on year in the second quarter ended September. Ryanair said fares are trending modestly ahead of the same period a year earlier in the current quarter.

For the six months to the end of September, pre-tax profit fell 16 percent to 2.4 billion euros, largely due to higher fuel costs, the BBC reported. The half year result shows the same pattern as the quarter: demand held up, fares did not rise enough to cover fuel, and profit fell.

Ryanair now has to decide how much of the extra fuel cost it can pass to passengers, how much it can save in talks with airports and staff, and how much it will absorb. The pay freeze is one option on the table, and the airline said the review covers all of its costs.

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