Ryanair announced it is evaluating cost-cutting measures including potential pay freezes, reduced crew ratios, and expanded use of artificial intelligence as the airline confronts significantly elevated jet fuel expenses.
The carrier projects fuel costs will increase by approximately €2bn in its financial year ending March 2028, attributing the surge to ongoing Middle East regional tensions. Chief Executive Michael O’Leary stated that unless the conflict reaches resolution quickly, fuel prices are likely to remain high through 2027. The airline expects European short-haul airfares will rise materially to accommodate higher fuel expenses, though such increases may not fully offset the substantial cost increase. Ryanair’s fuel hedging positions the company with 80% of requirements through March covered at $67 per barrel, while 25% of the subsequent 12-month needs are hedged at $95 per barrel.
The cost-reduction strategy has prompted immediate union pushback. The Unite union stated it maintains a multiyear pay agreement covering 2027 that is not performance-dependent, and union representatives indicated they expect the existing contract to be honored. Ryanair noted several labor agreements will require renegotiation beginning in March. Additionally, the airline is meaningfully slowing hiring for pilots, cabin crew, and training programs.
Ryanair is expanding artificial intelligence deployment to enhance operational productivity and back-office efficiency, with the airline reporting that AI applications have already increased capacity by 4%. The company noted that its fleet of 650 aircraft operates at a scale that benefits from machine learning capabilities for schedule optimization.
Financially, Ryanair reported a post-tax profit of €1.61bn for the quarter ending in September, representing a 6% decline from the prior year, though matching analyst projections. Passenger volumes increased 5% year-over-year to 64.5 million, while average fares declined 2% annually. The airline expects to receive Boeing 737 Max 10 deliveries in January, with the new aircraft offering 20% increased seating capacity and 20% improved fuel efficiency compared to current fleet aircraft.
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