Ryanair stated that its fuel bill is forecast to be €2bn higher in the short-term. The company noted that 80% of its fuel bill had been hedged at fixed prices, but the cost of the remaining unhedged portion remains elevated. The airline reported that its pre-tax profits fell by 16% to €2.4bn during the six months to the end of September. The profit drop was largely driven by fuel costs jumping by 15%.
Ryanair expects fuel prices to remain high well into 2027 unless there is a swift resolution to the conflict. The carrier also warned that aviation fuel prices may rise by €2bn in 2028 unless there is an end to the war.
The airline is weighing up the pay freeze as maturing labour agreements, which are multi-year wage deals with unions, come to an end. The wage policy could be implemented from April next year.
Ryanair is considering a temporary wage freeze for staff and confirmed airfares will be materially higher next summer following a sharp rise in fuel costs caused by the US-Israel war with Iran.
Aviation fuel prices have surged this year as the conflict has dramatically reduced the supply of refined products coming from the Gulf while increasing competition for products produced elsewhere.