Key takeaways
- Ryanair is exploring temporary employee pay freezes, staffing reductions, and AI-driven cost cuts to control expenses
- The airline faces a potential €2 billion increase in fuel expenses
- Ryanair's half-year profits declined 15% to €2.15 billion, even as revenue increased 3%
Ryanair is considering temporary employee pay freezes, reduced staffing levels, and more use of artificial intelligence as the airline prepares for a potential €2 billion increase in fuel costs.
The Irish budget airline announced the possible cost-cutting measures on Nov. 2, alongside financial results showing a 15% decline in half-year profits.
CEO Michael O'Leary warned that rising jet fuel prices, driven by the ongoing Middle East conflict, could force the company to introduce major operational changes despite expectations of higher ticket prices in 2027.
Ryanair Pay Freezes Could Affect Employees in 2027
Ryanair is reviewing labor agreements approaching renewal, and temporary salary freezes are among the measures being considered to control expenses. The airline is also exploring lower crew-to-passenger ratios, renegotiating airport agreements, and expanding AI adoption in administrative and operational departments.
However, no company-wide pay freeze has been officially implemented, and the extent of any potential workforce reductions is still unclear.
The proposed measures come as Ryanair anticipates a big increase in operating expenses when its existing fuel hedging agreements expire.
Ryanair Faces €2 Billion Fuel Cost Increase
According to the company's latest financial results, Ryanair expects its annual fuel bill to increase by approximately €2 billion during the financial year ending March 2028.
The airline currently has 80% of its fuel requirements hedged at approximately $67 per barrel through March 2027. However, only 25% of its requirements for the following financial year are hedged, at around $95 per barrel.
O'Leary warned that fuel prices could stay elevated well into 2027 unless the Middle East conflict is resolved.
He also suggested that European airfares could rise by double-digit percentages next year, although Ryanair may need increases approaching 20% to fully offset its additional fuel expenses.
Ryanair Profits Fall Despite Passenger Growth
Ryanair reported €2.15 billion in net profit for the six months ending Sept. 30, which represents a 15% decline from €2.54 billion a year earlier. Revenue increased 3% to €10.08 billion, while passenger numbers climbed 6% to 125.8 million. However, operating expenses rose 10% to €7.69 billion, and average fares declined 4%.
(Source: corporate.ryanair.com)
The airline also lowered its annual passenger forecast from 216 million to 214 million after reducing its winter flight schedule.
Despite the mounting cost pressures, Ryanair announced an €800 million share buyback program that is expected to begin in February of 2027.
