Airlines are warning of a mounting crisis as persistently high fuel prices force carriers to cut flights, axe costs and delay payments on leased aircraft. Industry bosses say the first winter season since the Iran war unleashed an energy shock has already depressed profits.
EasyJet and Lufthansa are scaling back capacity to navigate the winter season, marked by weaker demand and past bankruptcies. Delta Air Lines slashed its annual profit forecast, citing the Middle East conflict would cost it an extra $6bn this year.
Ryanair boss Michael O’Leary warned, "Everybody is going to be hurting next year... we are just trying to trim the ship as much as we possibly can." The spectre of airline failures this winter is higher than in previous years, with Spirit Airlines and air Baltic already collapsed.
IAG’s Luis Gallego cautioned that medium-sized and small companies will struggle to survive. EasyJet has doubled capacity reductions, removing 700,000 seats from its schedule, while industry-wide cuts reached 6mn seats in September alone.
Source: Financial Times Companies · Summarized by HeadlinesBriefing