Ryanair predicts 2 billion euro fuel bill increase

Ryanair is bracing for a major spike in fuel expenses next year. The Dublin-based carrier expects its fuel bill to rise by approximately 2 billion euros, or 1.7 billion pounds, for the financial year ending in March 2028. The jump comes as jet fuel prices remain high due to ongoing conflict in the Middle East.

The company currently has about 80% of its jet fuel supply locked in at lower prices through hedging. However, these protections will expire after the end of the current financial year. This leaves Ryanair exposed to current market rates for the rest of the coming fiscal period.

To manage the higher costs, executives are reviewing all operational expenses. The airline is considering temporary pay freezes and lower crewing ratios. It also plans to expand its use of artificial intelligence to improve productivity in back-office and support functions. Management stated that these measures are necessary because higher fuel costs will not be fully covered by ticket price increases.

Ryanair expects short-haul airfares in Europe to rise significantly to reflect the new fuel prices. Despite this, the airline noted that fare increases are unlikely to offset the entire cost surge. The company has already adjusted its strategy this year, lowering its passenger traffic target from 216 million to 214 million to account for unhedged fuel costs.

Financial results for the six months ending in September showed a mixed picture. Profit after tax dropped by 15% to 2.15 billion euros, or 1.79 billion pounds. Revenues climbed 3% to 10.08 billion euros, driven by a 6% increase in passenger numbers. Operating costs, however, rose by 10% to 7.69 billion euros, or 6.42 billion pounds.

Chief Executive Michael O’Leary said demand in the third quarter was strong, with fares trending slightly above the same period last year. He noted that the booking window remains close to the travel dates, which limits visibility on future sales. O’Leary added that the company has no visibility into the fourth quarter yet, making it too early to provide full-year profit guidance for 2027.