Paris (France) (AFP) – Low prices and reduced margins: the economic model of “low cost” airlines is being disrupted by the persistence of high fuel costs, which compromise their future.

Published on: 09/30/2026 - 10:32

Getting a plane off the ground has always been expensive, because it carries with it tens of tons of fuel, or even more than a hundred tons. This is even more true since the surge in oil prices, following the outbreak of war in the Middle East on February 28.

Under these conditions, making Transavia France profitable, for example, which mainly serves Europe and the Mediterranean basin, "is almost impossible", even with "very high occupancy rates", its director Olivier Mazzucchelli explained to AFP in mid-September.

The fact that this company is integrated into a powerful group, Air France-KLM, reduces the pressure to generate profits.

Others don't have this shell. In the United States, Spirit Airlines, a company in difficulty for several years, threw in the towel in May 2026. The first company to be directly victim of this expensive kerosene crisis, it left some 17,000 employees in the lurch.

Then in September, bad news came one after the other for the sector.

Peak in 2023

The Latvian Air Baltic has filed for protection under the American bankruptcy law (“Chapter 11”). The company had counted on kerosene at $685 per ton in 2026. However, its price in Europe today exceeds $1,500.

In Malaysia, speculation about AirAsia's viability has been fueled by press reports of the poor state of its finances. Management assures that the company will survive this crisis.

In Spain, Volotea leaked to the media, without an official announcement, that it would reduce its fleet to some 30 to 35 planes, compared to 44 currently, and negotiate a restructuring of its debt. “We are continuing our flights normally,” insisted its general manager Carlos Muñoz, in order to reassure a volatile clientele.

In India, the government has stepped up its oversight of SpiceJet's operations, to ensure its financial woes did not compromise flight safety.

In the pioneering, and now mature, market of domestic flights in the United States, the best days of “low cost” have passed. The peak capacity of this segment was reached in 2023, and it then eroded, year after year, according to calculations by the OAG firm.

The least profitable routes are the first to be abandoned. When Spirit Airlines disappeared, the Fort Lauderdale, Florida airport near Miami, known for its low-cost flights, lost routes that no competitor wanted to take over.

“Critical mass”

"I think we should start calling them 'lower cost airlines' rather than 'low cost airlines'," OAG analyst John Grant told AFP.

This economic model assumes a rigorous and permanent hunt for unnecessary costs and possible sources of savings. But this strategy may no longer be enough, with jet fuel, in the case of Spirit Airlines, around 50% more expensive than projected in the 2026 budget.

“Small or medium-sized companies, with fewer reserves in their cash reserves, are certainly the most affected,” according to John Grant. “It will be tenable for those that are large enough and with enough critical mass.”

Ryanair, the largest airline of its type in Europe, reduced its winter flight schedule at the beginning of September. Its CEO Michael O'Leary then explained to the press that with such high oil prices, he and his competitors would inevitably increase their prices in 2027.

Ten years ago, he said he was aiming for the lowest possible fares, down to 0 euros if possible, thanks to travelers' spending at airports, or public subsidies.

At the Financial Times, he now says that with a barrel of oil lasting around $140, a catastrophic scenario for air travel, the average price of a Ryanair ticket would rise to 80 or 90 euros, compared to 50 today.

© 2026 AFP

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