Ryanair is slowing hiring, may freeze some pay deals and expects to raise fares next year as it prepares for about 2 billion euros in extra fuel costs in its next financial year, Chief Executive Michael O’Leary said on Monday.

Speaking as Ryanair published its half-year results, O’Leary said the airline expects to raise fares by double-digit percentages next year. He said pay could be frozen at current levels if fuel prices stay high. “We are slowing down hiring meaningfully,” he said, according to the Financial Times, linking the slowdown to the number of recruitment and training courses for pilots and cabin crew now under way.

O’Leary told reporters that pay freezes could apply where unions have not agreed deals with the airline by April. The Irish Times reported that he said strikes would not worry him, and “they will actually save us money”. Ryanair’s pilots’ union, Ialpa, rejected the suggestion that pilots should accept pay freezes because of higher fuel costs, the newspaper reported.

Jet fuel prices have risen sharply since the conflict involving Iran began, and the FT reported that other carriers are preparing to cut hundreds of thousands of seats from winter schedules. O’Leary said the industry is “not well hedged” and that higher costs are likely to last at least until 2028, according to the FT.

Ryanair has hedged 80 percent of the fuel it needs for the 12 months to March 2027, at about 67 dollars a barrel. For the following year, to March 2028, it has hedged about a quarter at roughly 95 dollars a barrel, according to the airline’s results statement as reported by Travel Extra. Reuters reported that O’Leary said fares would need to rise about 20 percent in the year to March 2028 to cover the extra cost, but that he was unsure Ryanair could achieve that.

The company reported that profit after tax for April to September fell 15 percent to 2.15 billion euros. The FT reported that pre-tax profit fell 16 percent to 2.4 billion euros. Ryanair said passengers were hesitant to book because of the Iran conflict, and the FT reported that operating costs rose 10 percent. Ryanair’s shares are down about a quarter since the start of the year, the FT reported.

The airline has taken about 30 new aircraft a year for the past two years, but deliveries will fall to 15 a year for the next couple of years, the FT reported. It will begin taking Boeing 737 MAX 10 aircraft in January. The aircraft has about 20 percent more seats than its current models and burns less fuel, according to the FT.

Ryanair will also use more artificial intelligence in back-office work and in scheduling, O’Leary said. He said AI had already helped raise capacity by 4 percent across its network of about 650 aircraft. The airline has cut some unprofitable winter flights, including some midweek routes, and lowered its forecast for passengers in the 12 months to March from 216 million to 214 million, the FT reported.

Sources: Financial Time