Irish discount carrier Ryanair is bracing for a difficult 2027 as jet fuel prices rise and European oil hedges expire.
In its most recent earnings report, the airline said it is considering temporarily freezing pay for workers, lowering crew ratios, and ramping up use of artificial intelligence. The company did not specify how long it would look to freeze wages, or how it would adjust staffing.
Ryanair has over 27,000 employees across its group.
Speaking to CNBC on Monday, Ryanair CEO Michael O’Leary said ticket prices will rise across Europe as lower-price oil hedges run out.
“The market customers have been insulated for the last 12 months,” O’Leary said. “But those hedges are rolling off. There’s still no resolution in the Middle East. Jet oil today is $170 a barrel. I mean, this is a very significant cost cliff we’re all facing next year. I believe you’re going to see air fares rise next year across Europe by 10 percent, maybe even 20 percent.”
In its earnings report, Ryanair said that while short-haul air fares will increase “materially,” it will not be enough to offset the expected €2 billion increase in fuel costs, necessitating the additional cost-saving measures.
Fuel prices have prompted several major European airlines and airline groups to cut capacity this fall and winter, and to retire some older, less efficient aircraft. Price volatility also pushed Lufthansa to accelerate the shutdown of Lufthansa CityLine, and made the U.K.’s EasyJet amenable to a roughly $7.7 billion takeover by Apollo Global Management.
The price shock has generally been worse in Europe and Asia than in North America, as those regions are more dependent on Gulf oil and lack domestic refining capacity.
