Ryanair, Transavia, Volotea, and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights.
The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights.
Airlines aren’t waiting for a lack of supplies to react.
“Travel alert: airlines are cutting thousands of flights right now,” Travel Therapy TV host Karen Schaler said in an Instagram reel this past weekend. “Book early.”
That advice would win the approval of Ryanair boss Michael O’Leary, who expressed concern earlier this month that fears of fuel shortages were making people put off booking flights.
Low-cost carriers — which control a little more than a third of the global market, according to various estimates — are feeling the pinch first due to the nature of their business model.
With cheaper tickets, they have less capacity to absorb the rise in fuel costs.
Some of the cancellations may be the normal adjustments airlines tend to make when demand doesn’t meet expectations on certain routes.
“It is not unusual for carriers to adjust their schedules at this time of the year,” financial analyst Dudley Shanley at investment bank Goodbody told AFP.
But “if jet fuel prices remain at this level, there will have to be a little bit more trimming for low-cost airlines”, he added.
If before the war, airlines were able to maintain marginally profitable routes or even unprofitable routes, the surge in jet fuel prices will force them to make difficult choices.
That will start with many during the peak summer travel season.
“Unfortunately, it’s very likely that many people’s holidays will be affected, either by flight cancellations or very, very expensive tickets,” the EU’s energy commissioner Dan Jorgensen told Sky News last week.
The speed with which airlines are reacting depends in part upon the extent to which they secured fuel supplies in advance at fixed prices.
European airlines tend to do this to a greater extent than their rivals in other parts of the world.
Air Transat, a low-cost Canadian airline, has cut six percent of its May-October flight schedule.
