Ryanair forecasts €2bn fuel cost increase, plans fare hikes

Ryanair Holdings announced on 2 November 2026 that its fuel bill is expected to rise by €2 billion in its next financial year to March 2028, driven by elevated jet fuel prices. Chief executive Michael O'Leary stated the carrier would implement cost-saving measures including temporary salary freezes, reduced cabin crew staffing levels and expanded deployment of artificial intelligence for back-office functions. The Dublin-based airline reported profit after tax of €1.61 billion for the three months to end-September, down six per cent from the prior year period.

Hedging position and unprotected exposure#

For the current financial year to March 2027, the carrier has locked in 80 per cent of fuel requirements at approximately $67 per barrel. The carrier has secured hedges for only one quarter of its 2027-2028 requirements so far, at approximately $95 per barrel, a higher level than current-year contracts. O'Leary said in a video statement that the cost of fuel not subject to advance purchase agreements had soared. The carrier stated that unless there is a swift resolution of the Middle East conflict, jet fuel prices are expected to remain elevated well into 2027.

Fare increases and passenger traffic#

O'Leary said the airline anticipates double-digit percentage increases in ticket prices across European carriers during 2027 to offset rising fuel expenses. Revenue increased four per cent to €5.7 billion in the second quarter. Passenger traffic grew five per cent while fares fell two per cent as the conflict led to consumer hesitancy and later bookings. The carrier expects to carry 214 million passengers in its current fiscal year, up three per cent from 2025-2026. Europe's biggest airline by passenger numbers said it would reduce its winter schedule in response to higher fuel costs.

Cost reduction measures and forward guidance#

Ryanair announced cost-saving measures would include temporary pay freezes and lower cabin crew ratios. O'Leary stated the company was not yet in a position to issue full-year profit guidance, citing sensitivity to Middle East and Ukraine conflict developments, fuel price movements, macroeconomic conditions and air traffic control industrial action across Europe. Dan Coatsworth at AJ Bell stated that forward hedging had enabled numerous carriers to manage this year's oil price increase, but noted that expiring hedge contracts would expose the sector to substantially higher costs. Coatsworth said passengers should prepare for substantially higher ticket prices in the absence of a significant decline in oil markets.

Sources#

Khaleej Times: €2 billion fuel cost increase forecast, pay freeze and cabin crew ratio measures, second quarter profit and revenue figures, hedging positions, fare increase guidance, passenger traffic figures

Bloomberg: €2 billion fuel charge increase, cost purge initiative, Middle East conflict impact on oil prices