Ryanair is considering a temporary wage freeze for staff and confirmed airfares will be “materially higher” next summer because of a sharp rise in fuel costs following the US-Israel war with Iran.

The airline said it expects fuel prices to remain high “well into 2027” unless there is a “swift resolution” to the conflict.

Ryanair said its fuel bill is forecast to be €2bn (£1.6bn) higher in the short-term and its chief executive, Michael O’Leary, said airfares would have to rise by “double-digits” to help cover the cost.

But the firm said that was unlikely to be enough and it is looking into “temporary pay freezes”. Unite, the union which represents Ryanair staff, has been contacted for comment.

The airline said its pre-tax profits fell by 16% to €2.4bn during the six months to the end of September, largely due to higher fuel costs jumped by 15%.

Ryanair said its fuel bill is forecast to be €2bn higher in the short-term.

The company said that although 80% of its fuel bill had been “hedged” – in effect, bought in advance at fixed prices – the cost of the remainder was elevated.

O’Leary reiterated forecasts from earlier this year Ryanair would “need a 20% fare increase” to cover the cost of jet fuel.

“I’m not sure we’ll get to 20%,” he said. “But we’re certainly looking at double-digit fare increases across Europe from all airlines in 2027.”

Aviation fuel prices have surged this year as a result of the US-Israel war with Iran, which has dramatically reduced the supply of refined products coming from the Gulf and increased competition for those produced elsewhere.

Ryanair said it was weighing up freezing pay as “maturing labour agreements” – multi-year wage deals with unions – come to to an end and the policy could be implemented from April next year.

It also said it would increase its use of artificial intelligence within its back office and support functions.