Ryanair told investors on 2 November that maturing labour agreements “may require temporary pay freezes” as it looks for ways to cover an estimated €2bn rise in next year’s fuel bill. The same statement lists lower crewing ratios and more use of AI in back-office and support work. For HR leaders, it is a plain example of a large employer putting pay, staffing levels and automation into one cost review, in public, months before the agreements in question run out.
What Ryanair said
The airline’s first-half results reported profit after tax of €2.15bn for the six months to 30 September, down 15% from €2.54bn a year earlier. Traffic grew 6% to 125.8m passengers, average fares fell 4% and operating costs rose 10% to €7.69bn. The company said the price of the 20% of its jet fuel it had not hedged doubled to about $130 a barrel.
This year is largely protected. Ryanair says 80% of its fuel for the year to March 2027 is hedged at about $67 a barrel, which it says helped offset a further €300m EU environmental tax increase, higher maintenance costs and what it called “significant crew pay increases under new multi-year CLAs”, the collective labour agreements it has signed with unions.
The pressure arrives next year. Only 25% of fuel for the year to March 2028 is covered, at about $95 a barrel. Chief executive Michael O’Leary said fares would rise but not by enough to cover the gap.
“While we believe European short haul airfares will increase materially to reflect these much higher jet-fuel prices and competitor capacity reductions, this is still unlikely to provide a full offset for an estimated c.€2bn increase (based on current forward prices) in our FY28 fuel bill,” he said.
The company then set out where it will look. It is reviewing costs across its group airlines “with a particular focus on airport churn negotiations (as the fuel efficient MAX-10s deliver from Spring 2027), maturing labour agreements (which may require temporary pay freezes), lower crewing ratios and increased use of AI to drive further operational and back-office/support functions productivity.”
Three people levers in one sentence
The statement does not say a freeze has been decided, which agreements are maturing or when. It names the possibility and attaches it to the agreements as they come up. Read as a workforce plan, though, the sentence holds three separate levers, and each lands on a different part of the people function.
Pay at renewal
The first lever is the price of labour. Ryanair has just paid what it calls significant crew increases under new multi-year deals, and it is now signalling that the next round of renewals may bring a temporary freeze. For a unionised workforce, that means the comp conversation moves to the bargaining table and runs on the agreement calendar, which is fixed in advance.
Staffing ratios
The second lever is the number of people per unit of work. “Lower crewing ratios” means fewer crew relative to the aircraft and flights they cover. It changes rosters, standby pools, hiring targets and training intake.
AI in support work
The third lever is automation of back-office and support functions. Ryanair frames it as productivity, with no headcount number attached. Support functions are where HR, payroll, finance operations and customer service teams sit, so the HR team is likely to be both the planner of that change and one of the functions it reaches.
Why the timing matters for pay planning
Most employers plan pay one year at a time. Average US salary increase budgets for 2027 are projected at 3.4% to 3.5%, according to WTW and Payscale figures cited in JW Michaels’ 2027 salary guide. Multi-year collective agreements break that rhythm. A company can be paying a large contracted rise in one year and planning a freeze for the next, as Ryanair describes.
In our reading, the useful part of Ryanair’s statement for other employers is its sequencing. The company tied the possible freeze to the point at which each agreement matures, and put it alongside work-design changes (crewing ratios, AI) that reduce the cost of labour without touching the rate. That gives the business three ways to close a cost gap, and gives the people team three separate plans to prepare.
It also makes the plan public. Staff and unions can read the same results statement investors read, so the first conversation about pay at the next renewal will start from a sentence already on the record.
What it means for the HR leader
Employers outside aviation face the same structure whenever a large share of pay is set by multi-year agreements and costs move faster than the agreement cycle. Four steps follow from the Ryanair case.
- Map the agreement calendar against the budget calendar. List every collective or multi-year pay agreement, its expiry date and the rise it carries, and put it next to the finance plan for the same years. Gaps show up where a contracted rise lands in a year finance expects to be tight.
- Price the three levers separately. A rate freeze, a staffing ratio change and an automation programme have different costs, timelines and consultation needs. Model each one on its own before anyone combines them in a single savings target.
- Plan the communication before the investor statement. If the company will mention pay restraint in results or earnings materials, HR and employee relations should have a staff message and a union briefing ready for the same morning.
- Check what automation does to your own team. If back-office AI is on the list, the HR, payroll and shared-service teams are in scope. Write down which tasks change, which roles are affected and what the redeployment options are, so the people team is not planning its own change last.
Earlier pieces here argued that employers should stop apologising for a 3% raise and that hiring plans need a backfill line. Ryanair’s statement adds the case where pay restraint is planned a year out and announced to investors first.
The company says it has zero visibility on the fourth quarter so far and that it is too early to give meaningful profit guidance for the year to March 2027.
Source: Ryanair
