Ryanair is considering a temporary wage freeze for staff to pay for a sharp rise in its fuel costs which have surged following the US-Israel war with Iran.
The carrier said it expects fuel prices to remain high “well into 2027” unless there is a “swift resolution” to the conflict.
Ryanair said its fuel bill is forecast to be €2bn (£1.6bn) higher in the short-term and said it expects European airfares to increase to help cover the cost.
But it said that was unlikely to be enough and, among a number of measures, it is looking into “temporary pay freezes”. The has contacted Unite, the union which represents Ryanair employees, for comment.
The airline said its pre-tax profits fell by 16% to €2.4bn during the six months to the end of September, largely due to higher fuel costs jumped by 15%.
Ryanair said that although 80% of its fuel bill had been “hedged” – in effect, bought in advance at fixed prices – the cost of the remainder had doubled.
Aviation fuel prices have surged this year as a result of the war in the Middle East, which has dramatically reduced the supply of refined products coming from the Gulf and increased competition for those produced elsewhere.
Ryanair’s chief executive, Michael O’Leary, said last month he expects the firm and other airlines to increase fares by 15% to 20% next year.
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.
“The question is, will that increase in airfares be enough to cover the dramatically higher oil bills? I don’t think it will be.”
Ryanair said it was weighing up freezing pay as “maturing labour agreements” – multi-year wage deals with unions – come to to an end.
It also said it would increase its use of artificial intelligence within its back office and support functions.