Ryanair is exploring cost-cutting measures, including staff wage freezes, lower onboard crew ratios, and enhanced artificial intelligence productivity, to counteract heavy energy price inflation. While the carrier currently holds robust fuel hedges at $67 a barrel, that coverage plummets significantly to 25% at higher rates for the following year. Despite fuel headwinds, passenger volumes grew 5% to 64.5 million in the quarter ending in September, even as quarterly post-tax profits dropped 6% to €1.61bn. Full-year financial results will now depend heavily on late bookings made for upcoming midterm breaks and Christmas travel.
Key points
Surging fuel expenses threaten operating margins, forcing management to seek savings acro…: Surging fuel expenses threaten operating margins, forcing management to seek savings across labour contracts and operational staffing.
Anticipated short-haul industry airfare increases of up to 20% will not be sufficient to…: Anticipated short-haul industry airfare increases of up to 20% will not be sufficient to offset the projected €2bn fuel bill increase.
Carrier profitability for the final quarter remains dependent on close-in consumer bookin…: Carrier profitability for the final quarter remains dependent on close-in consumer bookings for Christmas and midterm travel.
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Ryanair is considering cost-cutting measures including implementing pay freezes, reducing crew on flights and increasing the use of AI to offset soaring fuel costs because of the Middle East conflict.
Europe’s biggest low-cost carrier said it expects European airlines to raise their ticket prices by as much as 20%, as it anticipates its jet fuel costs will increase by about €2bn (£1.6bn) in its next financial year, which ends in March 2028.
“Unless there is a swift resolution of the Middle East conflict we expect jet fuel prices to remain elevated well into 2027,” said Michael O’Leary, the chief executive of Ryanair. “While we believe European short-haul fares will increase materially to reflect these much higher jet-fuel prices and competitor capacity reductions, this is unlikely to provide a full offset for an estimated €2bn increase in our fuel bill.”
The oil price hit a six-month high last Friday but fell on Monday to about $110 a barrel.
Ryanair said it expects European short-haul fares will “increase materially” next year as a result, as the oil hedging deals taken out by…
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