The International Air Transport Association (IATA) has issued a warning that is shaking the sector: airline net profit will be cut in half by 2026. The direct cause is the price of fuel, which has doubled following the conflict with Iran. This scenario has already led to the bankruptcy of Spirit Airlines and foreshadows a future where flying will be more expensive and the supply of low-cost flights will be significantly reduced.
Cheap fuel was the engine of low-cost airlines ✈️
The business model of low-cost airlines was built on two pillars: extreme operational efficiency and, above all, affordable fuel. With the price of kerosene doubling, that margin disappears. Spirit Airlines, with its fleet of Airbus A320s and an ultra-low-cost strategy, was the first to fall. To maintain routes, airlines are forced to raise fares or eliminate less profitable routes. The result is a reduction in market competition.
Flying cheap: a luxury going up in kerosene smoke 💸
So, dear passenger, get ready to pay as if you were flying business class even if you're in row 42. The dream of 20-euro flights has gone down the drain, just when fuel costs as much as a whiskey in the VIP lounge. The good news is you'll have less competition at the airport; the bad news is that your wallet will be competing directly with the price of crude oil. And as always, oil wins.