Sun Express is trimming capacity across its network this winter and passing some extra costs onto passengers as the carrier tries to cushion the blow from rising jet fuel prices driven by the Middle East conflict. The airline, a joint venture between Deutsche Lufthansa AG and Turkish Airlines, will shave about 10% of seats from its routes during the quieter travel period, offering 4.5 million instead of the previous 5 million, Chief Executive Officer Marcus Schnabel said Wednesday. The reductions will come from paring back its daily frequencies and canceling some domestic flights in Turkey.
Sun Express' fuel bill rose by about €200 million ($225 million) this year after hedging and is expected to be higher next year, said Schnabel, who joined Sun Express in February after more than 20 years at Lufthansa. He succeeded Max Kownatzki, who now runs Eurowings. "Of course, you have to forward some of it to the market," he said in an interview. Schnabel expects fares to increase by as much as 10% next year, but he said Sun Express was working to keep its overall holiday package prices stable. Airlines around the world have slimmed winter schedules, cut earnings outlooks and started cost purges as high oil prices eat into their bottom lines.
Sun Express, a budget carrier, is leaning into more upscale offerings as demand for premium leisure travel remains strong. The airline is currently in talks about creating a premium bundle to make it easier for customers to secure a row with a free middle seat, priority boarding and food all at once, he said. The airline's fleet includes 86 Boeing Co. narrowbodies, and it's expecting deliveries of eleven 737 Max 8 models next year.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing