Ryanair braces for a €2 billion rise in fuel costs and considers a pay freeze

Profit fell as the fuel bill grows

Ryanair reported results for the first half of the financial year ending in March 2027. Net profit for the period from April to September 2026 was €2.15 billion — 15% less than a year earlier, the outlet euronewsreported. Revenue rose 3% to €10.08 billion, passenger traffic grew 6% to 125.8 million people, but fares fell 4%. Operating expenses increased 10% to €7.69 billion.

Hedging provides only partial protection

The reason for the decline in profit is the rise in jet fuel prices against the backdrop of the US and Israel's war with Iran, which reduced petroleum product supplies from the Persian Gulf region. The company hedged 80% of its fuel needs for the current financial year at a price of about $67 per barrel — noticeably below market rates, but the cost of the remaining 20% has doubled. For the next financial year, 2027/28, only a quarter of needs are hedged — at about $95 per barrel, which is still below current prices. At current forward prices, Ryanair estimates its fuel bill will rise by roughly €2 billion in the next financial year.

Pay freeze and the union's response

To offset rising costs, Ryanair is considering cost-saving measures: a temporary pay freeze from April 2027, a lower crew-to-passenger ratio, and wider use of AI in operational and support services. The union Unite, which represents Ryanair employees, said it had not been informed of any 'such proposals' and pointed to a multi-year pay agreement currently in force that also covers the next year. The union's national officer Oliver Richardson stressed that the agreement 'was not tied to the company's results and did not depend on them' — and, in his words, Ryanair itself particularly emphasized this, so the union expects it to be honored. Similar agreements, he noted, exist at a number of unions across Europe.

Fares, capacity and forecasts

CEO Michael O'Leary confirmed that fares next summer will be 'noticeably higher': 'We are definitely looking at double-digit fare growth across Europe for all airlines in 2027.' Earlier, at the end of October, in an interview with Euronews he warned that European fares could rise by up to 20% in 2027. The company expects that higher fares and competitors' capacity cuts will not fully cover the additional fuel costs. Ryanair has already cut its winter schedule, lowering its passenger traffic target from 216 million to 214 million, and expects the cuts to continue into summer 2027; in the medium term, it estimates, capacity on short routes will remain limited until the early 2030s. The company did not provide a full profit forecast for the year, citing uncertainty around conflicts, fuel prices, the economy and disruptions in European air traffic management. Alongside this, a share buyback program of €800 millionwas announced, starting in February 2027 and lasting about ten months. AJ Bell analyst Dan Coatsworth noted that many airlines weathered the oil price spike thanks to forward hedging, but those contracts will soon expire, and the industry faces a significant rise in costs.