✈️ The future of low-cost passenger airliners is put under question by kerosene prices

Low prices and low margins, the business model of low-cost airlines is being overwhelmed by high fuel costs, which endanger their future.

Taking off a plane has always been an expensive operation because planes carry dozens of tons of fuel, sometimes even more than a hundred tons. This is all the more true after the oil prices explosion following the outbreak of the war in the Middle East on February 28.

Under these circumstances, the profitability of the low-cost carrier Transavia France, for example, serving mainly Europe and the Mediterranean basin, is 'practically impossible', even with 'very high load levels'," its director, Olivier Mazzucchelli, told AFP. The fact that this company is part of a strong group, Air France-KLM, reduces the pressure to generate profits.

But other low-cost airlines do not have this protective shield. In the United States, Spirit Airlines, a company that has been experiencing difficulties for several years, went bankrupt in May 2026. Then, in September, bad news accumulated for the sector.

Latvian airline Air Baltic has filed for placement under the protection of the United States Bankruptcy Act. The company was betting on a kerosene price of $685 a tonne in 2026. However, the price in Europe is now over $1,500.

In Malaysia, speculation about the viability of AirAsia has been fuelled by press articles about its precarious financial situation. The company's management claims the carrier will survive this crisis.

In Spain, the airline Volotea has leaked to the press, without an official announcement, that it will reduce its fleet to about 30 to 35 aircraft, from 44 aircraft at present, and will negotiate a debt restructuring. "We continue our flights as usual," Chief Executive Carlos Murroz insisted in an attempt to reassure the clientele.

In India, the Government has stepped up its oversight of SpiceJet's operations to ensure that its financial difficulties do not compromise flight safety.

In the domestic flight market in the United States, the heyday of low-cost airlines is over. The maximum capacity for this segment was reached in 2023 and since then it has decreased every year, according to calculations of the consulting firm OAG. The least profitable routes are abandoned first. When Spirit Airlines went missing, Fort Lauderdale airport in Florida, near Miami, known for its low-cost flights, lost routes that no competitor was willing to take over.

“I think we should start calling them ‘lower-priced airlines’ instead of ‘low-cost airlines,’” John Grant, an analyst at the OAG, told AFP.

This business model requires a rigorous and continuous tracking of unnecessary costs and sources of possible savings. But this strategy may not be enough, kerosene, in the case of Spirit Airlines, costing about 50% more than expected in the 2026 budget.

“Small and medium-sized airlines with fewer cash reserves are certainly the most affected. It will be sustainable for those who are large enough enough and have sufficient critical mass,” says John Grant.

In early September, Irish airline Ryanair, Europe's largest low-cost airline, announced the reduction in the winter flight schedule. The managing director, Michael O'Leary, later explained to the press that, given such high oil prices, he and his competitors would inevitably raise prices in 2027.

Ten years ago, the same Michael O'Leary said he was targeting the lowest possible tariffs, up to zero of the euro if possible, thanks to passenger spending at airports or government subsidies.

In an interview with the Financial Times, Michael O'Leary now says that if oil prices hold around $140 a barrel for a prolonged period, a catastrophic scenario for the aviation industry, the average price of a Ryanair ticket would rise to €80 or €90, up from €50 at the moment.

🔗 https://agerpres.ro/economic-extern/2026/09/30/scumpirea-kerosenului-pune-sub-semnul-intrebarii-viitorul-companiilor-aeriene-low-cost--1598248