Ryanair says it may freeze workers' pay and raise airfares
Ryanair reports a 16% drop in pre-tax profits to €2.4bn as fuel costs surge, weighing up temporary pay freezes and higher ticket prices.
Stock photo for illustration only, not from the actual event
- Ryanair's pre-tax profits fell 16% to €2.4bn during the six months leading up to the end of September.
- Higher fuel costs jumped by 15%, with the airline forecasting an extra €2bn on its short-term fuel bill.
- The carrier is considering temporary pay freezes and increasing airfares to offset surging operational expenses.
Budget airline Ryanair has warned that it may have to implement temporary pay freezes for its workers and raise airfares as it grapples with mounting financial pressures. Unite, the union representing Ryanair staff, has been contacted for comment regarding the airline's latest announcements.
The carrier reported that its pre-tax profits dropped by 16% to €2.4bn during the six-month period ending in September, driven largely by a 15% jump in fuel costs. Ryanair stated that its short-term fuel bill is forecasted to increase by €2bn.
Although the company noted that 80% of its fuel bill had been hedged—meaning purchased in advance at fixed prices—the remaining portion's costs remain elevated. Aviation fuel prices have surged this year due to the US-Israel war with Iran, which severely limited the supply of refined products from the Gulf and intensified competition elsewhere.
Regarding workforce policies, Ryanair is weighing up wage freezes as multi-year labour agreements with unions come to an end, a policy that could potentially be implemented starting in April next year.
The fact that an ultra-low-cost carrier like Ryanair is exploring pay freezes and fare hikes highlights how vulnerable the aviation sector remains to geopolitical shocks and Middle Eastern conflicts, even when companies deploy aggressive fuel hedging strategies covering a vast majority of their consumption.
Alongside potential wage and ticket adjustments, the airline also announced plans to increase its deployment of artificial intelligence across its back office and support functions to drive operational efficiencies.
Source: BBC Business
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