Ryanair Grapples with Soaring Fuel Costs, Eyes Fare Hikes and Wage Freezes
Airline considers temporary pay freezes and increased AI use to offset expenses as fuel prices are expected to remain high into 2027.
Sarah Connor
Ryanair faces significant financial pressure from persistently high fuel prices.
Ryanair considers a temporary wage freeze for staff. The airline also plans increased use of AI to help offset the surge in fuel costs next year. The group reviews all costs, focusing on labor agreements and potentially lower crewing ratios.
The airline will also review the increased use of AI. This will drive further operational, back-office, and support functions productivity. European short-haul airfares are expected to increase materially to reflect higher fuel prices.
Ryanair cut its traffic target for the year from 216 million passengers to 214 million. This move offsets increases in unhedged fuel costs. Average fares fell by 2% year on year in the quarter ending September.
While third-quarter demand is strong, with fares trending modestly ahead of the same quarter last year, the booking window remains closer-in which reduces visibility.
However, fare prices in the final three months of the year trended 'modestly ahead' of the same quarter last year, Ryanair claims. Michael O’Leary stated, "While third-quarter demand is strong, with fares trending modestly ahead of the same quarter last year, the booking window remains closer-in which reduces visibility."
O’Leary further noted, "The third-quarter’s fare outcome will heavily depend on the strength of close-in October/November school mid-term and Christmas bookings."