Ryanair announced it is evaluating multiple cost-reduction measures as the airline faces significantly higher fuel expenses in the coming financial year. Chief Executive Michael O’Leary indicated that jet fuel costs are expected to rise approximately €2bn through March 2028, with prices remaining elevated into 2027 unless the Middle East conflict is resolved swiftly.
The airline plans to review expenditures across its operations, with particular emphasis on airport negotiations, labor agreements potentially involving temporary pay freezes, reduced crew ratios per flight, and expanded artificial intelligence applications. O’Leary noted that several pay agreements are scheduled for renegotiation beginning in March. However, the Unite union stated it maintains a multiyear pay agreement covering 2027 that is not contingent on company performance and should be honored. Other European unions reportedly hold similar arrangements with Ryanair.
Additional measures under consideration include slowing recruitment for pilots, cabin crew, and training programs. The airline indicated AI has already contributed to a 4% capacity increase by improving scheduling and operational productivity. O’Leary stated that managing 650 aircraft requires machine-based optimization. Ryanair also plans to reduce aircraft deliveries from approximately 30 annually to 15 annually over the next several years.
Ryanair reported strong financial results for the quarter ending in September, with post-tax profit of €1.61bn, though this represented a 6% decline year-over-year. Passenger numbers increased 5% to 64.5 million during the period. Average fares fell 2% year-over-year, though fourth-quarter fares were trending modestly ahead of the prior year. The airline expects European short-haul fares to increase materially next year as fuel hedging contracts expire. Currently, 80% of Ryanair’s fuel needs through March are hedged at $67 per barrel, while 25% of subsequent 12-month requirements are hedged at $95 per barrel.
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