Ryanair is to freeze the pay of 36 senior managers, including CEO Michael O'Leary, as it seeks savings of around €400m.
The new cost-cutting initiatives come as the price of oil rises to over $100 a barrel.
At a news conference in Brussels Mr O'Leary warned that Ryanair would continue to increase the cost of checking in luggage in order to encourage passengers to fly with only hand luggage where possible.
The airline is reviewing all its major costs including airports, staffing levels and fuel because of the soaring price in oil.
Mr O'Leary would not be drawn on where exactly the cuts would be made.
But he warned that airports not able to reduce costs may find themselves losing Ryanair flights, while those who do make significant cost reductions would be rewarded with more flights.
Mr O'Leary said Ryanair's profits would be badly affected by the surge in oil prices, warning that next year's profits could fall by as much as 50%.
He stressed, however, that Ryanair's fares should not be affected and that he still hoped to double the volume of business over the next five years.
Mr O'Leary launched a scathing attack on the European Commission for its investigations into small airports across Europe where Ryanair has been launching operations.
The Commission has been checking whether Ryanair has been enjoying favourable terms from governments and regional authorities which may qualify as illegal state aid at airports such as Charleroi in southern Belgium and Bratislava in Slovakia.
Mr O'Leary claimed these were market driven discounts and complained that numerous state airlines, like Air France and Alitalia, had for years been enjoying state air and bail-outs.
