PARIS: Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices resulting from the war in the Middle East and are cutting back flights.
The closure of the Strait of Hormuz has taken much of oil reserves off the market, sending the price of jet fuel soaring and raising fears of shortages that could force airlines to cancel flights.
Airlines are not waiting for a lack of supplies to react.
“Traveler alert: Airlines are currently cutting thousands of flights,” Travel Therapy TV host Karen Schaler said in an Instagram Reel last weekend. “Book early.”
The advice would win the approval of Ryanair boss Michael O’Leary, who expressed concern earlier this month that fears of fuel shortages were causing people to postpone their flight bookings.
Low-cost airlines – which control just over a third of the global market, according to various estimates – are the first to suffer due to the nature of their business model.
With cheaper tickets, they have less ability to absorb rising fuel costs.
Some of the cancellations may be the normal adjustments that airlines tend to make when demand does not meet expectations on certain routes.
“It’s not unusual for carriers to adjust their schedules at this time of year,” said financial analyst Dudley Shanley of investment bank Goodbody. AFP.
But “if jet fuel prices remain at this level, they will have to be reduced a little more for low-cost companies,” he added.
If, before the war, airlines were able to maintain unprofitable or even unprofitable routes, the surge in jet fuel prices will force them to make difficult choices.
This will begin for many during the peak summer travel season.
“Unfortunately, it is very likely that many people’s holidays will be affected, either by flight cancellations or by very, very expensive tickets,” said EU Energy Commissioner Dan Jorgensen. News from the sky last week.
“Faster than the bear”
How quickly airlines respond depends in part on the extent to which they have secured fuel supplies at fixed prices in advance.
European airlines tend to do this to a greater extent than their rivals in other parts of the world.
Air Transat, a Canadian low-cost airline, reduced its flight schedule by 6% from May to October.
Southeast Asia’s largest low-cost carrier, AirAsia X, announced on Friday that it was cutting more flights and even some routes, without providing an overall figure.
Earlier this month, the Malaysia-based no-frills airline announced it was raising fares by up to 40% and that about 10% of all its flights had been canceled so far.
Hungarian budget airline Wizz Air has so far resisted cutting its flights.
“We are not cutting capacity, because I think the others will cut capacity,” its general director Jozsef Varadi recently declared, quoted by the specialist magazine Aviation Week.
“You don’t have to run faster than the bear, but faster than the guy next to you,” he added.
He was perhaps thinking of the most dramatic reductions made in the sector by the German group Lufthansa, which had just announced the elimination of 20,000 flights from its schedule until October, as well as the shutdown of its regional airline CityLine.
Its European rival Air France-KLM reduced flights by 2% in May and June from its low-cost subsidiary Transavia.
KLM has limited cancellations to 1% of its European flights.
Ryanair cited not fuel prices but high costs and taxes when it announced last week that it would cut its flights to and from Berlin from October.
It also cuts 10% of flights from Dublin, criticizing the airport’s limited capacity.
Since the start of the month, the Spanish company Volotea has cut almost 1% of its flights compared to its summer program.
