Ryanair may freeze pay and raise fares as fuel costs rise

Ryanair has announced it may implement a temporary wage freeze for its staff and confirmed plans to increase airfares significantly next summer due to a sharp rise in fuel costs. The company attributes the fuel price surge to the ongoing US-Israel war with Iran, which it expects to keep prices elevated well into 2027, according to BBC Business.

The airline forecasts its fuel bill will increase by €2 billion in the short term. Ryanair's chief executive, Michael O'Leary, stated that airfares would need to rise by double-digit percentages to help cover these increased costs. However, he also noted that even a 20% fare increase might not be sufficient.

Ryanair's pre-tax profits dropped 16% to €2.4 billion in the six months ending September, largely due to a 15% jump in fuel expenses. Despite having hedged 80% of its fuel costs at fixed prices, the remaining costs have risen substantially.

The company is also considering slowing down hiring amid rising expenses. The union representing Ryanair staff, Unite, said it has not been informed about any pay freeze proposals. O'Leary reiterated earlier forecasts that a 20% fare increase might be necessary but expressed uncertainty about reaching that level.

Ryanair's financial challenges stem from geopolitical tensions affecting fuel prices, leading to strategic decisions on staffing and pricing to manage the impact.