Flying in Europe to get costlier? Ryanair warns of 20% airfare hike, weighs employee wage freeze
Ryanair is considering a temporary pay freeze for employees and a slowdown in recruitment as soaring aviation fuel costs threaten to push airfares across Europe up by as much as 20% in 2027.
The Irish low-cost carrier has warned that ticket prices will need to rise by double digits as its existing fuel hedging arrangements expire and the financial impact of the Middle East conflict intensifies.
Chief Executive Michael O'Leary said jet fuel prices could remain elevated well into 2027 unless there is a swift resolution to the conflict involving the US, Israel and Iran.
The airline estimates that its fuel expenditure could increase by around €2 billion in the short term, leaving it with limited options to offset the additional costs through higher ticket prices alone.
The airline is reviewing several cost-cutting measures, including temporarily holding employee wages flat from April 2027 as existing multi-year labour agreements approach their expiry.
Ryanair is also considering reducing recruitment, operating flights with fewer crew members, renegotiating airport agreements and expanding the use of artificial intelligence in administrative and support functions.
However, the proposed pay freeze has drawn a response from Unite, the union representing Ryanair employees in the UK. National officer Oliver Richardson said the union had not been informed of any such proposal and pointed out that a multi-year pay agreement already covers the coming year.
He added that the agreement was not linked to the airline's financial performance and that the union expected Ryanair to honour its commitments.
O'Leary told CNBC that European airfares could increase by 10% to 20% next year as airlines confront a sharp rise in jet fuel prices.
"I believe you're going to see airfares rise next year across Europe by 10%, maybe even 20%," he said, pointing to jet fuel prices of around $170 a barrel.
Ryanair has warned that even double-digit fare increases may not fully compensate for the projected rise in fuel expenditure. The airline expects short-haul ticket prices to move higher as carriers pass on a greater proportion of their operating costs to passengers.
Chief Financial Officer Neil Sorahan, however, expects travel demand to remain resilient. He told RTÉ that an additional €5 or €10 on a Ryanair ticket would not necessarily discourage people from travelling.
Ryanair has secured fixed prices for 80% of its fuel requirements through March 2027 at approximately $67 a barrel. This provides some protection against the immediate surge in energy prices, although the remaining unhedged portion is exposed to prevailing market rates.
For the following 12 months, the airline has hedged 25% of its fuel requirements at $95 a barrel, compared with 15% at an average of $85 a barrel at the end of June.
The airline expects fuel prices to remain elevated unless conditions in the Middle East improve. Disruptions to refined fuel supplies from the Gulf have intensified competition for aviation fuel from alternative sources.
The cost pressures are already visible in the airline's financial results. Ryanair reported a 15% decline in after-tax profit to €2.15 billion for the six months ended September 30, compared with €2.54 billion a year earlier.
Revenue increased 3% to €10.08 billion, while passenger numbers rose 6% to 125.8 million. However, average fares declined 4% to €55.70 from €58.
The airline has also reduced its annual passenger target to 214 million from 216 million and expects winter passenger volumes to remain broadly unchanged from last year.
Ryanair shares rose 3.7% in Irish trading on Monday, although the stock remains down approximately 19% this year.
The carrier has warned that winter flight reductions could continue, with short-haul capacity across Europe potentially remaining constrained into the early 2030s. Its full-year profit outlook remains uncertain, with fuel prices, geopolitical tensions and air traffic control disruptions among the key risks.
Sayantani Biswas is an assistant editor at Livemint with seven years of experience covering geopolitics, foreign policy, international relations and global power dynamics. She reports on Indian and international politics, including elections worldwide, and specialises in historically grounded analysis of contemporary conflicts and state decisions. She joined Mint in 2021, after covering politics at publications including The Telegraph. <br> She holds an MPhil in Comparative Literature from Jadavpur University (2019), with a specialisation in postcolonial Latin American literature. Her research examined economic nationalism through Eduardo Galeano’s Open Veins of Latin America. She also writes on political language, cultural memory and the long shadows of conflict. <br> Biswas grew up in Durgapur, an industrial town in West Bengal shaped by migration, which drew families from across India to the Durgapur Steel Plant. As the only child in a joint family, she spent years listening—almost obsessively—to her grandparents’ testimonies of struggle, fear and loss as they fled Bangladesh during the Partition of 1947. This formative exposure to lived historical memory later converged with her training in Comparative Literature, equipping her to analyse socio-economic structures and their reverberations. <br> Outside the newsroom, she gravitates towards cultural history and critical theory, returning often to texts such as Paulo Freire’s Pedagogy of the Oppressed. As a journalist, she is committed to accuracy, intellectual rigour and fairness, and believes political reporting demands not only clarity and speed, but historical depth, contextual precision, and a disciplined resistance to spectacle.
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