Pay and staffing under review
The cost review spans Ryanair's group airlines, with airport negotiations and labor agreements nearing expiration among its priorities. Options include temporary pay freezes, lower crew ratios on flights and greater use of AI. The company said its AI efforts would target productivity in "further operational and back office/support functions".
Ryanair, Europe's largest airline by passenger numbers, expects its fuel bill to rise by about €2 billion (£1.6 billion) in the financial year ending March 2028.
"Unless there is a swift resolution of the Middle East conflict we expect jet fuel prices to remain elevated well into 2027," CEO Michael O'Leary said. He expects higher fuel prices and competitors' capacity reductions to push up European short-haul fares, though not enough to absorb the entire increase in Ryanair's fuel costs.
Fuel protection falls as hedges expire
Ryanair has locked in prices for 80% of its fuel needs through the end of March at $67 a barrel. For the following 12 months, only 25% is hedged, at $95 a barrel. The airline expects European short-haul fares to rise substantially next year as airlines' existing hedging agreements expire.
Higher prices have already affected the portion of Ryanair's fuel purchases outside those agreements. Its unhedged 20% doubled in price to about $130 a barrel, contributing to a 10% increase in costs during the six months ended September 30, 2026.
In a November 2 interview with CNBC, O'Leary said jet fuel was trading at $170 a barrel. He described the coming year as "a very significant cost cliff" and reiterated his forecast that European airfares could rise by 10% to 20% in 2027.
The International Air Transport Association's monitor put average jet fuel prices in Europe and the CIS at $207.61 a barrel for the week ended October 16, 2026, almost 128% above a year earlier. Separately, oil prices retreated to about $110 a barrel on Monday after reaching a six-month high the previous Friday.
Profit falls despite passenger growth
For the quarter ended September 30, Ryanair earned €1.61 billion after tax, matching analysts' expectations despite a 6% year-over-year decline. It carried 64.5 million passengers, up 5%, while average fares were 2% lower.
The six-month results showed a steeper profit decline. Profit after tax fell 15%, from €2.54 billion to €2.15 billion, as costs increased and fares weakened. Revenue grew 3%, but the average fare dropped 4% to €57.50.
Ryanair said fares for the final three months of 2026 were tracking "modestly ahead" of the year-earlier quarter. With customers booking closer to departure, however, it said visibility remained limited. The quarter's fare performance would depend heavily on late bookings for the October-November school midterm holiday and Christmas.
The airline's Irish-listed shares rose initially on the results day before giving up some gains. As of November 2, they had lost more than 22% during 2026.
Winter traffic target reduced
Ryanair had already announced in September that it would lower its full-year passenger target from 216 million to 214 million to limit winter exposure to unhedged fuel. It now expects passenger traffic from November through March to be broadly unchanged from a year earlier.
In Belgium, the airline is removing 20 routes and 1.1 million seats from its winter schedule and relocating six aircraft to lower-cost markets. It attributes those cuts to Belgium's planned increase in aviation tax from €2 to €7 per passenger, effective January 2027.
