Europe's era of cheap budget flights is ending as airlines grapple with soaring fuel costs. Ryanair faces a €2bn fuel bill increase, forcing potential trims and higher fares. Lufthansa lowered its profit forecast while integrating ITA and TAP.
Jet fuel prices in the Middle East have surged past $1,200 a tonne due to reduced refining capacity and regional conflicts. Budget carriers like Ryanair will see fuel consume 44% of revenue next year, up from 37%. Full-service airlines such as IAG and Lufthansa face smaller impacts, with fuel accounting for 20-25% of revenue.
Ryanair may need a 16% revenue increase to offset costs, with average fares already rising. Michael O'Leary expects further price hikes as winter approaches.
Source: Financial Times Companies · Summarized by HeadlinesBriefing