● Covered by 1 source · 1 reportMedium impact1 neutral
Ryanair Considers Cost-Cutting Measures Amid Soaring Fuel Costs
Key points
- Ryanair projects a €2 billion increase in fuel costs by March 2028.
- Cost-cutting measures include pay freezes, reduced crew, and AI integration.
- European short-haul fares are expected to rise by up to 20%.
- Ryanair's Q2 post-tax profit fell 6% year-on-year to €1.61 billion.
Fuel Costs Drive Strategic Review
Ryanair is considering various cost-cutting strategies in response to a significant increase in jet fuel expenses. The airline forecasts its fuel costs will rise by approximately €2 billion by the end of its financial year in March 2028, largely attributed to the ongoing Middle East conflict keeping oil prices elevated. This financial pressure is prompting a review of operational expenditures across the group.
Proposed Cost-Cutting Measures
To address the rising costs, Ryanair is looking at several internal adjustments. These include potential temporary pay freezes for employees, reducing the number of crew members on flights, and expanding the use of artificial intelligence. The AI implementation will focus on improving productivity within operations, back-office functions, and support departments.
Impact on Airfares and Market
Ryanair expects European airlines to increase ticket prices by up to 20% in response to higher fuel costs. The airline itself anticipates that European short-haul fares will "increase materially" as existing fuel hedging deals expire. However, Ryanair's CEO, Michael O'Leary, noted that even with fare increases, the projected €2 billion fuel bill increase might not be fully offset.
Financial Performance and Outlook
For the quarter ending in September, Ryanair reported a post-tax profit of €1.61 billion, a 6% decrease year-on-year, which aligned with analyst expectations. Passenger numbers for the quarter grew by 5% to 64.5 million. Average fares for the quarter fell by 2% year-on-year, though fares for the current quarter are trending "modestly ahead" of the previous year. The company's fuel hedging covers 80% of its requirements until March at $67 a barrel, and 25% for the subsequent 12 months at $95 a barrel.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
Ryanair is evaluating cost-cutting measures, including potential pay freezes, reduced crew numbers, and increased AI use, to mitigate a projected €2 billion rise in jet fuel costs by March 2028. The airline anticipates European short-haul fares will increase significantly due to elevated fuel prices and expiring hedging deals, though this may not fully offset the increased fuel bill.