Ryanair Weighs Pay Freezes as Fuel Bill Set to Jump €2 Billion

Ryanair expects a fuel bill €2bn (£1.6bn) higher in the short term, and says even European airfare increases will probably not cover it — so it's considering temporary pay freezes for staff.

The Irish carrier laid out the shortfall while reporting a sharp drop in earnings. Pre-tax profits fell 16% to €2.4bn in the six months to the end of September, largely due to higher fuel costs, the airline said.

Ryanair expects fuel prices to stay high "well into 2027" unless there's a "swift resolution" to the conflict that began with the US-Israel war with Iran. Aviation fuel prices have surged this year because the Middle East war dramatically cut the supply of refined products from the Gulf and intensified competition for fuel produced elsewhere.

That's the squeeze: costs up on one side, hedging only partly softening the blow.

How exposed is Ryanair, exactly?

The airline said 80% of its fuel bill had been "hedged" — effectively bought in advance at fixed prices. The cost of the remaining 20% has doubled.

That unhedged slice is what's driving the €2bn short-term increase. Filling it won't come cheap, and Ryanair doesn't think passengers alone can do it. It expects European airfares to rise to help cover the cost, but said that's unlikely to be enough. Among a number of measures, it's now looking into "temporary pay freezes."

The BBC has contacted Unite, the union representing Ryanair employees, for comment. No union response is in yet.

Take it plainly: the airline wants workers to share the cost of a war-driven fuel spike, and fares will rise regardless.

What did Michael O'Leary say about fares?

Ryanair's chief executive, Michael O'Leary, said last month he expects the firm and other airlines to raise fares by 15% to 20% next year.

He was blunt about the scale. He said at the time: "You're going to see the biggest increase in airfares, I would say, in history in Europe in the next 12 months."

And blunt about the limits. He added: "The question is, will that increase in airfares be enough to cover the dramatically higher oil bills? I don't think it will be."

Two numbers frame the pressure: a 15-20% fare rise forecast from the top of the company, and a chief executive who doesn't believe it closes the gap.

Why the Gulf war hits airline costs

The mechanism is supply. The war in the Middle East dramatically reduced the supply of refined products coming from the Gulf, and increased competition for those produced elsewhere. For an airline that hedges 80% of its fuel, the doubling of spot-market prices on the remainder is still enough to add €2bn in the short term.

Hedging delays the pain; it doesn't erase it. And with Ryanair pricing high fuel "well into 2027," the question isn't one bad season — it's a multi-year cost plateau.

In short: the war pushed jet fuel up, hedging blunted most of it, and the rest lands on profits, passengers and now possibly pay packets.

What happens next?

Watch three things: whether Unite accepts or fights the freeze; how quickly fares actually move toward O'Leary's 15-20% range; and whether the Middle East conflict resolves before 2027. If fares can't cover the oil bill — as O'Leary himself predicts — then pay freezes move from option to inevitability for Europe's biggest low-cost carrier.