Ryanair Plans Cost Cuts Amid Rising Fuel Prices

Ryanair reported a 15% drop in net profit for the first half of the fiscal year, totaling 2.15 billion euros. The result was pressured by higher aviation fuel prices and lower average fares, despite growth in passenger volume.

The company estimates a 2 billion euro increase in its fuel bill for the coming year. This scenario is worsened by the conflict between the United States, Israel, and Iran, which has restricted the global supply of refined products and pushed up oil barrel prices.

To mitigate the financial impact, the company has launched a cost review that includes the possibility of a temporary wage freeze. The strategy also involves using artificial intelligence in administrative and support roles to boost operational efficiency.

CEO Michael O'Leary warned that airfares in Europe could see double-digit increases in 2027. The company has already lowered its annual traffic target to 214 million passengers as it seeks to reduce exposure to fuel purchases without price protection.

Although the company has hedged 80% of its fuel consumption at 67 dollars per barrel, the remaining portion is subject to market volatility. The cost of unprotected kerosene has doubled, forcing the company to pass some of this expense on to end consumers.