Ryanair warns that high fuel costs will likely mean more expensive flights and frozen staff pay

Surging energy costs are dining into Ryanair's profits, which it has warned could guide to additional costly tickets and icy pay for staff.

Ryanair reported on Monday that its post-tax profits were downward 15% to 2.15 milliard euros, or concerning $2.4 billion, for the six months preceding September 30.

As the world's largest prosperity airline, Ryanair is known for its cheap fares, bolstered by a powerful fuel-hedging strategy that uses financial derivatives to fastener in forthcoming prices. However, the Iran War has kept energy prices high.

While Ryanair has hedged additional than 80% of its energy expenses at about $67 per cask until next March, the remaining fifth has doubled in cost to approximately $130 per barrel, the transporter stated in its earnings report.

It added that it expects its energy invoice to addition by 2 milliard euros ($2.2 billion) for the next financial year.

The transporter stated it believes airfares volition increase because of higher jet energy prices, but that won't be adequate to offset all its additional costs.

"We need concerning a 20% addition in airfares, or concerning 10 euros per passenger, to prosperity all of that," CEO Michael O'Leary stated on the earnings call. "While I do think there volition be a important boost in airfares next year, I am not certain we volition see 20%. Therefore, we do need to near that gap."

The transporter stated it is hence "reviewing all costs," which may contain impermanent pay freezes for staff.

Ryanair additionally suggested lowering the crew-to-passenger proportion on its flights, and expanding its use of AI to boost efficiency in operations and assistance functions.

To decrease the effect of unhedged energy costs, Ryanair has additionally cut its traffic mark from 216 myriad passengers to 214 million, which would outcome in no year-over-year growth for the coming winter season.

Next year, it hopes to boost growth by 3% by expanding its fleet alongside 16 new Boeing 737 Max 10 aircraft. The Max 10 has area for an additional 20 passengers than the Max 8. The Max 10 was certified by the Federal Aviation Administration final duration following years of delays, alongside European regulators apt to aid certification soon.

As of 7 a.m. ET, Ryanair shares were up concerning 2% in Europe, and 2.75% in pre-market selling on the Nasdaq, as it additionally announced a portion buyback of 800 myriad euros ($896 million).