Rising fuel prices are putting increasing pressure on Ryanair. The Irish low-cost airline reported a decline in profits during the important summer quarter and expects significantly higher expenses in the upcoming financial year. To offset the additional costs, the company is considering comprehensive cost-cutting measures. These could also include temporarily freezing employee salaries.
Profit Decline Despite Rising Passenger Numbers
Between July and September, Ryanair’s net profit fell by six percent compared with the same period last year, reaching €1.61 billion. The result was in line with analysts’ expectations. At the same time, the airline increased its revenue by four percent to €5.7 billion. Passenger numbers also rose by five percent.
However, the decline was more pronounced during the first half of the 2026/2027 financial year. Net profit for this period was 15 percent lower than in the previous year.
Higher kerosene prices resulting from the conflict in the Middle East were among the main factors affecting the airline’s financial performance. The price of unhedged fuel doubled during the period under review. In addition, average ticket prices during the peak summer season were two percent lower than a year earlier. The tense geopolitical situation made many travellers more cautious and encouraged them to book flights later, putting downward pressure on fares.
Billions in Additional Fuel Costs
Ryanair also expects substantial additional expenses for the financial year ending in March 2028. Based on current estimates, its fuel bill could increase by approximately €2 billion, representing a rise of around 33 percent compared with the previous level. The airline expects kerosene prices to remain elevated throughout 2027 if tensions in the Middle East continue.
In response, Ryanair is planning significant fare increases. Ticket prices could rise by double-digit percentages. However, according to CEO Michael O’Leary, fares would need to increase by approximately 20 percent to fully offset the additional costs. Whether such an increase can actually be achieved remains uncertain.
Pay Freezes and Further Cost-Cutting Measures Possible
Alongside higher ticket prices, Ryanair is pursuing a comprehensive cost-cutting programme. Employee salaries could be temporarily frozen from April onwards. This would include suspending salary increases, promotions involving higher pay and bonus payments.
The airline is also considering reducing staffing levels on board and cutting administrative costs through the increased use of artificial intelligence. Airport contracts are also under review, with Ryanair seeking to reduce the fees charged by airports.
Fuel Hedging Remains an Important Factor
According to the company, Ryanair has secured 80 percent of its fuel requirements through March 2027 at a price of 67 US dollars per barrel. For the following twelve months, the airline recently increased its hedging coverage to 25 percent. The average price for this portion stands at 95 US dollars per barrel.
Despite the cost pressures, demand is currently developing positively. During the ongoing third quarter, ticket prices are slightly above last year’s levels. Ryanair also expects demand to remain strong throughout the upcoming financial year.
