Ryanair is considering a temporary wage freeze for employees as soaring fuel costs put pressure on the airline's finances, the carrier has announced.

The budget airline said its fuel bill is forecast to rise by €2bn (£1.6bn) in the short term, following a sharp increase in aviation fuel prices linked to the war in the Middle East.

Ryanair said the conflict has dramatically reduced the supply of refined fuel products from the Gulf and increased competition for those produced elsewhere. The carrier warned it expects fuel prices to remain high "well into 2027" unless there is a "swift resolution" to the conflict.

The airline reported that although 80% of its fuel bill had been "hedged" — in effect, bought in advance at fixed prices — the cost of the remaining 20% had doubled.

Ryanair's pre-tax profits fell by 16% to €2.4bn during the six months to the end of September. The airline attributed the decline largely to a 15% jump in fuel costs over the same period.

The company said the expected rise in European airfares was unlikely to be sufficient to cover the increased costs on its own. Among the measures under consideration, Ryanair said it is looking into "temporary pay freezes" as "maturing labour agreements" — multi-year wage deals with unions — come to an end.

The airline also said it would expand its use of artificial intelligence within its back-office and support functions as part of its cost-reduction efforts.

Ryanair chief executive Michael O'Leary said last month that he expects the airline and its competitors to raise fares by between 15% and 20% next year.

He said at the time: "You're going to see the biggest increase in airfares, I would say, in history in Europe in the next 12 months.

"The question is, will that increase in airfares be enough to cover the dramatically higher oil bills? I don't think it will be."

Unite, the union representing Ryanair employees, had not responded to a request for comment at the time of reporting.