Ryanair Sees Fuel Bill Jump By €2 Billion Amid Middle East Conflict

Ryanair is preparing to raise airfares and potentially freeze wages for its employees to offset a sharp increase in fuel expenses. The carrier stated that its fuel bill is expected to rise by €2 billion, or £1.6 billion, in the short term. This surge follows the conflict between the United States, Israel, and Iran, which has disrupted fuel supplies from the Gulf region.

Michael O'Leary, the airline's chief executive, told reporters last month that European airfares will likely increase by 15 percent to 20 percent over the next year. He described the upcoming price hike as the largest in European aviation history for a 12-month period. O'Leary expressed doubt that higher ticket prices would fully compensate for the steep jump in oil costs.

The airline reported that its pre-tax profits dropped by 16 percent to €2.4 billion in the six months ending in September. Fuel costs alone rose by 15 percent during that period. Ryanair noted that while 80 percent of its fuel requirements were locked in at fixed prices through hedging, the cost of the remaining fuel doubled.

To manage the financial pressure, Ryanair is considering temporary pay freezes for staff. The company is reviewing these measures as long-term labor agreements with unions reach their expiration dates. Unite, the union representing Ryanair workers, has been contacted for a comment on the proposal.

The airline also plans to expand the use of artificial intelligence in its back office and support departments. Ryanair expects fuel prices to remain elevated well into 2027 unless the conflict in the Middle East resolves quickly. The company stated that the combination of fare increases and internal cost cuts is necessary to maintain operations despite the market volatility.

Aviation fuel prices have climbed significantly this year due to reduced supply of refined products from the Gulf. This scarcity has intensified competition for fuel produced in other regions. Ryanair indicated that these external factors are driving the need for immediate financial adjustments across its European network.