A carrier that once sold itself on cheapness now finds that the distant fire of a Gulf war has reached into the price of every seat and every paycheque it touches. Ryanair, facing a sharp rise in fuel costs that followed the US-Israel conflict with Iran, has warned that summer 2027 fares will climb and that its staff may be asked to accept a temporary pay freeze. The moment is one in which the old bargain between firm, worker and traveller is being renegotiated under pressure, and the outcome will depend on whether the promises made in better years still hold in harder ones.
Ryanair Weighs Pay Freeze and Warns of Higher Fares as Iran War Drives Up Fuel Costs
Fares will be "materially higher" next summer
Mark
Start with the headline number. Why does a 15% rise in fuel cost hit profit so hard?
Mimi
Fuel is one of an airline's biggest costs. Profits fell 16% to €2.4bn in six months, and Ryanair forecasts a €2bn higher fuel bill in the short term.
Mark
But they hedged 80% of fuel. Doesn't that protect them?
Mimi
Mostly, yes. But the unhedged fifth is priced at elevated levels, and hedging only delays the problem if prices stay high into 2027.
Luke
Worth flagging: the 2027 outlook is conditional. Ryanair says prices stay high unless there's a swift resolution to the war. That's a company expectation, not a certainty.
Mark
And the fare rises? O'Leary mentioned 20%.
Mimi
He repeated an earlier forecast that 20% would be needed, then said he wasn't sure they'd get there. He expects double-digit increases across Europe from all airlines.
Luke
That's his prediction about the whole industry, and he's the one selling the tickets. Nobody else is quoted confirming it.
Mark
What about the pay freeze?
Mimi
It's being considered, possibly from April next year. Unite says it hasn't been told of any proposal and that its multi-year deal covers next year.
Luke
So it's an option under review, not a decision. Whether Ryanair can legally or practically override those agreements isn't answered here.
Mark
What else is unresolved?
Luke
How deep the flight cuts go, and how much AI will replace back-office work. Neither is quantified.
El Pulso
- Fuel costs have jumped, pushing Ryanair's bill up by a forecast €2bn and shrinking half-year pre-tax profit by 16%.
- Airfares next summer are set to rise materially, with O'Leary expecting double-digit increases across European carriers.
- A possible April 2027 pay freeze has landed on staff, and Unite insists a multi-year deal already protects them.
- Hiring is slowing, AI is being pushed into back-office roles, and winter flights are being cut with more reductions promised.
- The hedge covering about 80% of fuel buys time, but the unhedged fifth keeps the pressure live and the outcome unsettled.
A carrier that once sold itself on cheapness now finds that the distant fire of a Gulf war has reached into the price of every seat and every paycheque it touches. Ryanair, facing a sharp rise in fuel costs that followed the US-Israel conflict with Iran, has warned that summer 2027 fares will climb and that its staff may be asked to accept a temporary pay freeze. The moment is one in which the old bargain between firm, worker and traveller is being renegotiated under pressure, and the outcome will depend on whether the promises made in better years still hold in harder ones.
Ryanair has told its staff and customers the same uncomfortable thing: costs are rising, and someone will have to pay. On Monday the airline said it is weighing a temporary pay freeze and that fares next summer will be "materially higher," a direct consequence of the fuel price surge that followed the US-Israel war with Iran.
The figures are stark. Pre-tax profits fell 16% to €2.4bn in the six months to September, driven by a 15% rise in fuel costs, and the airline now expects its fuel bill to climb a further €2bn in the short term, with prices likely to stay high into 2027 unless the conflict is quickly resolved. About 80% of fuel was bought in advance at fixed prices, but the remaining fifth is costly, and the war has tightened supply of refined products from the Gulf.
Chief executive Michael O'Leary said fares would need to rise by double digits, and he repeated that Ryanair would "need a 20% fare increase" to cover jet fuel, though he was not certain it would reach that. Higher fares alone, the airline acknowledged, will not be enough, which is why pay is now under consideration.
The freeze could start in April, when multi-year wage deals end. Unite, which represents Ryanair staff, said it had not been told of any proposal, and its officer Oliver Richardson pointed out that a multi-year agreement already covers next year. The union says that deal was never tied to company performance, and it expects it to be honoured.
Other measures are already underway: hiring is slowing, more work is moving to artificial intelligence in back-office roles, and winter flying has been cut, with further reductions to come. O'Leary expects capacity to stay constrained into the early 2030s. The open questions are whether a freeze is formally put to the unions, and how they respond.
Ryanair has told its staff and its customers the same thing in different ways: costs are climbing, and someone will have to pay. On Monday the airline said it is weighing a temporary pay freeze for employees and confirmed that fares next summer will be "materially higher", a direct result of the jump in fuel prices that followed the US-Israel war with Iran.
The numbers behind the warning are specific. Ryanair's pre-tax profits fell 16% to €2.4bn in the six months to the end of September, largely because its fuel costs rose by 15%. Looking ahead, the airline forecasts its fuel bill will be €2bn (£1.6bn) higher in the short term. It expects prices to stay elevated well into 2027 unless the conflict is swiftly resolved.
The airline is partly cushioned. About 80% of its fuel has been hedged, meaning it was bought in advance at fixed prices. But the remaining fifth is being bought at elevated prices, and that is enough to hurt. The wider cause is a squeeze on supply: the war has sharply reduced the refined products coming out of the Gulf, and buyers are now competing harder for fuel produced elsewhere.
Chief executive Michael O'Leary said fares would need to rise by double digits to help absorb the cost. He repeated an earlier forecast that Ryanair would "need a 20% fare increase" to cover jet fuel, though he added that he was not sure the airline would reach that level. What he does expect, he said, is double-digit increases across Europe from all airlines in 2027. Ryanair acknowledged that higher fares alone are unlikely to be enough, which is why pay is now on the table.
The company said a freeze could take effect from April next year, as multi-year wage deals with unions come to an end. Unite, which represents Ryanair staff, said it had not been told of any such proposals. Oliver Richardson, the union's national officer, said a multi-year pay deal already covers next year, as it does for a number of unions across Europe. He said the agreement was not tied to company performance, something he said Ryanair itself had been at pains to stress, and that the union expects it to be honoured.
Other cost-control measures are already in motion. O'Leary said hiring would slow as costs rise, and the airline will make more use of artificial intelligence in its back office and support functions. Ryanair has also trimmed its winter flying schedule and said further cuts are coming. It described this as an industry-wide pattern, particularly among short-haul carriers.
O'Leary said he believes the capacity cuts will continue into the summer of 2027, and that over the medium term short-haul capacity will stay constrained out to the early 2030s. The immediate questions are whether Ryanair formally puts a pay freeze to its unions, and how Unite responds when it does.
Citas Notables
I'm not sure we'll get to 20%, but we're certainly looking at double-digit fare increases across Europe from all airlines in 2027.— Michael O'Leary, Ryanair chief executive
Our pay agreement was not attached to, nor dependent on company performance... we would expect it to be honoured.— Oliver Richardson, national officer, Unite
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