Ryanair Warns of €2 Billion Fuel Hit, Opens Cost Review That Could Include Pay Freezes

Ryanair is cutting into its own cost base before the real fuel bill arrives.

The Irish carrier, Europe's largest by passenger numbers, said today, Nov. 2, that it is reviewing costs across the group. It expects fuel to cost about €2 billion more in the financial year that begins April 1, 2027 and ends in March 2028, based on current forward prices.

The numbers

Profit after tax for the six months to Sept. 30 was €2.15 billion, down 15% from €2.54 billion a year earlier. For the July-to-September quarter, net profit fell 6% to €1.61 billion, in line with a company poll of analysts.

Revenue rose 3% over the half. Average fares dropped 4% to €57.50. Unit costs rose 5%, and total costs climbed 10% as the unhedged slice of Ryanair's fuel roughly doubled to about $130 a barrel.

The airline also said it no longer books compensation for delayed aircraft deliveries.

Why next year is different

Ryanair has 80% of its fuel needs through March 2027 hedged at $67 a barrel. That protection is the reason the damage so far is a 15% profit dip rather than something worse.

The cover thins out after that. Ryanair has hedged 25% of the following 12 months at $95 a barrel, up from 15% at an average of $85 at the end of June.

"Unless there is a swift resolution of the Middle East conflict, we expect jet-fuel prices to remain elevated well into 2027," CEO Michael O'Leary said in the company's statement. He added that as low-cost hedges roll off, "all EU airlines face a significantly higher fuel bill next year."

Ryanair expects short-haul fares to rise materially next year, but not by enough to fully offset the added fuel cost.

What gets cut

The review covers airport contracts, labour agreements that could require temporary pay freezes, lower crew ratios on aircraft, and more artificial intelligence in back-office and support work.

"Everything is on the table, as we say, whether that's pay freezes or other areas," CFO Neil Sorahan said in an interview. "I think we're looking at a higher oil environment for possibly the next 12 months; we need to tighten our belt for the next 12 months."

The airport talks are timed around deliveries of the fuel-efficient Boeing 737 MAX 10, which start in spring 2027.

Capacity and shareholders

Ryanair trimmed its fiscal 2027 passenger target to 214 million from 216 million and plans a slimmed-down winter schedule. For fiscal 2028 it aims to carry more than 220 million passengers, helped by the MAX 10s.

Shareholders still get paid. A dividend of €0.273 a share is due in late February 2027, and a new €800 million buyback starts the same month.

Ryanair shares are down about 23% this year, against an 11% decline in the Bloomberg world airlines index. That is roughly in line with Wizz Air. EasyJet is up 33% after agreeing a takeover with Apollo Global Management.

Fares and the rest of the industry

Average fares fell 2% year on year in the July-September quarter. They are trending modestly ahead of last year in the current quarter. Ryanair said demand for the third quarter is strong but that it has zero visibility on the fourth.

O'Leary has gone further on pricing. At a news conference in Brussels, he predicted European fares would rise by "10, 15, maybe 20%" next year, which he called "the biggest increase in air fares, I would say, in history in Europe." He said most European carriers are lightly hedged for 2027 and predicted bankruptcies and takeovers.

The pressure is not confined to Europe. Delta cut its 2026 earnings outlook on Oct. 9, citing about $6 billion in added fuel costs. Third-quarter fuel expense rose 62% to $4.1 billion, and Delta now guides to adjusted earnings of $5.10 to $5.60 a share, down from $6.50 to $7.50 in July. The industry body IATA estimates airlines worldwide had hedged only about a third of their expected 2026 fuel.

Taxes on top of fuel

In Brussels, O'Leary also announced Ryanair is cutting 20 routes and more than one million seats from Belgium this winter. He tied the move to the Belgian federal government's decision to raise its aviation tax from €2 to €7 in January.

EasyJet has separately cut 700,000 seats from its winter schedule to save fuel.

What to watch

The open question is whether fare increases and cost cuts can keep pace once Ryanair's cheap fuel contracts expire in March 2027. Ryanair has not said how many hedges it will add before then, or whether pay freezes will be imposed or negotiated with staff.