{"id":116181,"date":"2026-05-16T05:26:16","date_gmt":"2026-05-16T05:26:16","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/116181\/"},"modified":"2026-05-16T05:26:16","modified_gmt":"2026-05-16T05:26:16","slug":"the-iran-war-and-the-future-of-cheap-flights-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/116181\/","title":{"rendered":"The Iran war and the future of cheap flights \u2013 The Irish Times"},"content":{"rendered":"

Helen Martin had just booked a dream honeymoon for clients of her travel agency: Singapore for several nights and on to Langkawi in Malaysia, scheduled for early 2027. Then the Iran war<\/a> began. <\/p>\n

As soaring jet fuel costs<\/a> pushed up flight prices across the industry, the itinerary was scaled back. Now, the happy couple\u2019s plans are on hold. <\/p>\n

\u201cThey want to wait and see if the prices come down,\u201d says Martin, a UK-based agent at Travel Counsellors. <\/p>\n

From once-in-a-lifetime luxury trips to cheap European weekend breaks, rising prices threaten to take the wind out of a global travel market that has been booming. <\/p>\n

\u201cWe hear this a lot,\u201d Martin adds. \u201cPeople find they either have to downgrade their expectations or upgrade their budget.\u201d <\/p>\n

Over decades, steadily lower comparative costs have seen air travel move from the preserve of the wealthiest to something so common that most households in the west now expect to make at least one holiday flight a year. <\/p>\n

Ryanair<\/a>, Europe\u2019s king of low-cost air travel, boasts that you can fly across the Continent for less than the price of parking your car at one of the regional airports it serves. <\/p>\n

In response to the Iran conflict, the airline industry has cancelled thousands of flights that would have lost money when forced to use more expensive fuel. Early this month, Spirit Airlines went bust in the US, the first in what executives expect to be a wave of failures around the globe. <\/p>\n

[\u00a0What is the current situation with Ryanair, Aer Lingus and other airlines amid jet fuel issues?Opens in new window<\/a>\u00a0]<\/p>\n

\u201cThe structural changes we are seeing … will expand,\u201d Lufthansa chief executive Carsten Spohr said this month. \u201cThe stronger will become stronger, and the weaker ones will become weaker.\u201d <\/p>\n

Tony Fernandes, co-founder and chief executive of AirAsia, a budget airline based in Malaysia, agrees: \u201cI get the feeling that there could be more mergers in store for even the bigger airlines,\u201d he said. <\/p>\n

\"\"PrepayPower are hiking their prices – will other energy suppliers soon follow suit?<\/p>\n

The winnowing of the airline industry, notorious for its low margins and cut-throat price battles, is a semi-regular occurrence. Most years see dozens of smaller carriers cease operations in bankruptcies that go largely unremarked upon outside of passengers or staff directly affected. <\/p>\n

But every few years, a crisis sweeps through the sector like a wrecking ball, bringing with it a step change in consolidation. <\/p>\n

\u201cThe airline industry has lots of problems very regularly,\u201d says Andrew Lobbenberg, an airlines analyst for Barclays. \u201cWe have seen lots of crises \u2013 9\/11, Covid. This is the next Covid.\u201d He predicts bankruptcies, mergers and more rapid \u201cretirement of old aircraft\u201d.<\/p>\n

All this will make the industry stronger \u2013 but weaken the competitive forces that keep fares affordable, raising the possibility that an era of cheap airline travel may be drawing towards an end.<\/p>\n

[\u00a0Tour operators record sharp decline in overseas holiday bookingsOpens in new window<\/a>\u00a0]<\/p>\n

\u201cNo airline wants to be cheap, they want to be profitable,\u201d says Andrew Charlton, head of consultancy Aviation Advocacy. \u201cLow-cost air travel was only ever a parenthesis. The era of \u00a320 (\u20ac23.05) flights is for sure coming to an end.\u201d <\/p>\n

The last big crisis to sweep global aviation was the Covid-19 pandemic, when skies were emptied of aircraft. Many airlines received government assistance and laid off staff. Since then, the industry has ridden a profit wave. <\/p>\n

\"AnAn Airbus factory in France. Photograph: Caroline Blumberg\/EPA <\/p>\n

A period of so-called \u201crevenge travel\u201d when people spent lockdown savings gave way to a new normal of higher discretionary spending on airfares, especially in premium economy and business class. <\/p>\n

Long delays in aircraft deliveries from Boeing and Airbus have left the industry with fewer planes than needed to meet demand, helping airlines maintain pricing discipline that is so often eroded in a push for greater market share. <\/p>\n

Now, the Iran conflict has thrust the sector into its latest bout of disruption, with tens of thousands of flights cancelled and knock-on effects that have rippled across the world.<\/p>\n

For Gulf carriers such as Emirates<\/a>, Qatar Airways<\/a> and Etihad<\/a>, the conflict has severely affected operations. In the early weeks the region\u2019s airspace closed, sapping customer numbers and forcing the carriers to ground aircraft.<\/p>\n

But for most global airlines, the biggest impact from the conflict has not been the fighting, but the doubling of the global jet fuel price. Some 40 per cent of Europe\u2019s kerosene comes through the Strait of Hormuz<\/a>, the key arterial waterway that has been closed since the conflict started.<\/p>\n

\"\"What do sky-high jet fuel prices mean for travellers?<\/p>\n

Even once a lasting ceasefire is reached, it will take weeks, maybe even months, to remove mines from the area, and longer for the full flow of fuel to replenish the world\u2019s diminished supplies. <\/p>\n

The industry is attempting to combat public warnings of impending jet fuel shortages \u2013 some by guaranteeing to lock in holiday prices to sway nervous consumers. <\/p>\n

As jet fuel begins to run dry in certain areas, airlines are resorting to logistical gymnastics to keep their planes in the air. Lufthansa<\/a> has been routing some Cape Town flights via Namibia to refuel, while Malaysia\u2019s AirAsia was at one stage carrying two flights worth of fuel to Vietnam in order to allow its planes to return without refuelling on the ground.<\/p>\n

But beyond availability it is the price of jet fuel \u2013 which is airlines\u2019 largest single cost even in normal times \u2013 that has caused worries of viability across the sector. <\/p>\n

Every airline that has reported earnings since the conflict started has warned that higher costs will wipe out some or all of their profits for this year. <\/p>\n

\u201cIt very much depends on what the late summer market is like, and obviously what happens to the conflict,\u201d said EasyJet<\/a> chief executive Kenton Jarvis in a call with journalists in mid-April, as his airline lost more than expected during the normally thin winter months. <\/p>\n

[\u00a0Airlines across Europe cut prices to entice holidaymakers worried about jet fuel shortagesOpens in new window<\/a>\u00a0]<\/p>\n

Many in the industry are now wondering who, after Spirit, might be next to fall into bankruptcy.<\/p>\n

No sooner had the conflict begun than investors started betting against the weaker airlines. <\/p>\n

The number of \u201cshort positions\u201d \u2013 an investing strategy to profit from a declining share price \u2013 in Hungarian low-cost carrier Wizz Air<\/a> rose to almost a sixth of its entire shareholding. <\/p>\n

Investors have raised concerns for years that Wizz has too many aeroplanes on order, including some long-range aircraft that it does not need after walking away from a botched attempt to enter the Middle Eastern market. <\/p>\n

What is more, it competes at the fiercely competitive end of the pricing spectrum, placing it up against Ryanair, the ultra-lean Irish carrier whose laser focus on cost makes it one of the industry\u2019s most formidable rivals. <\/p>\n

\"WizzWizz Air passengers in Luton Airport pictures in 2023. Photograph: Steve Parsons\/PA Wire <\/p>\n

Last month, Wizz co-founder and chief executive J\u00f3zsef V\u00e1radi convened a special meeting for London journalists to emphasise the company\u2019s financial viability. <\/p>\n

\u201cThis is probably the most important chart today,\u201d he said, as a slide appeared showing the company has \u20ac2 billion of cash left to fund its operations. <\/p>\n

\u201cThere is a lot of noise out there, but I don\u2019t really want to make a commentary on [the market], because simply all those bets are just untrue and unfounded.\u201d<\/p>\n

Over in the US, concerns are also rising about JetBlue and Frontier, two of the US rivals to the now-defunct Spirit. <\/p>\n

\" A Southwest Airlines passenger jet in Austin, Texas. Photograph: Carter Johnston\/The New York Times <\/p>\n

While the US budget airlines raised their costs by buying newer aircraft in recent years, the big four network carriers \u2013 United<\/a>, American<\/a>, Delta<\/a> and Southwest<\/a> \u2013 were cutting prices and offering some no-frills seats, eating directly into the low-cost market. <\/p>\n

\u201cSome of the ultra low-cost carriers that were using old aircraft suddenly decided to buy new aircraft, and so their cost structures went up. I think that gave the opportunity to the legacy carriers to compete,\u201d AirAsia\u2019s Fernandes says. <\/p>\n

\u201cOne of the things that Asia has is that demand has grown and continues to grow. The United States, Europe may have peaked in demand, and so everyone\u2019s competing for a smaller pie.\u201d<\/p>\n

Europe\u2019s airline sector has consolidated over decades, with many of the smaller operators either going bust or rolling into one of three mega-players: Air France-KLM<\/a>, Lufthansa, and British Airways<\/a>\u2019 owner International Airlines Group (IAG)<\/a>.<\/p>\n

IAG, whose stable also includes Iberia, Aer Lingus<\/a> and Vueling, walked away from bidding to buy a stake in Portugal\u2019s TAP this year. <\/p>\n

But the group, which is flush with cash and has one of the industry\u2019s strongest balance sheets, is open to making acquisitions. <\/p>\n

\u201cWe are always surveying the market,\u201d said chief executive Luis Gallego on a call for investors. \u201cYou have seen Spirit in the US. Some airlines are going to have difficulties, they will need to reduce capacity, that can be an opportunity for us.\u201d What is more, the airline has already been approached by two rivals about co-operation, he told investors. <\/p>\n

\u201cWe look for opportunities where we can apply the model we have for the group and can improve the performance of the different companies,\u201d he said, but added: \u201cIt is not a \u2018must\u2019 to have more companies in the group.\u201d <\/p>\n

[\u00a0Tour operators record sharp decline in overseas holiday bookingsOpens in new window<\/a>\u00a0]<\/p>\n

In previous periods of crisis, airline executives have taken the opportunity to clean house and this time will be no different. One of the first likely targets is legacy planes that burn more costly fuel. <\/p>\n

Just as the pandemic saw older jets removed by airlines \u2013 such as BA\u2019s entire fleet of Boeing 747s, the original jumbo jet \u2013 analysts expect that higher prices will speed up retirements of less-efficient models. <\/p>\n

Already, Lufthansa has said it will retire its older 747-400 models and some of its older Airbus A340s earlier than planned. The jumbo jets will be retired for the winter and will only return next summer if needed, the airline told investors this month. <\/p>\n

Air France-KLM is considering phasing out its A330-200s next year, earlier than originally planned, \u201cdepending on how things play out,\u201d according to its chief executive Ben Smith. <\/p>\n

The biggest question is over the world\u2019s A380 fleet. The goliath of the skies seats more than 500 people in a double-decker four-engine aircraft the size of a building. It burns more fuel than two A350s, the next largest model made by Airbus, put together, according to executives who have modelled running both aircraft.<\/p>\n

Emirates, the world\u2019s largest user of the aircraft, remains firmly wedded to the model and has frequently asked Airbus to make a similar-sized replacement. <\/p>\n

[\u00a0British Airways Irish chief says \u2018game-changing\u2019 AI has helped cut delaysOpens in new window<\/a>\u00a0]<\/p>\n

British Airways, which is spending millions of pounds revamping its first-class suites in its double-decker models, said they remain a core part of its arsenal. <\/p>\n

Yet, for other carriers, the future is uncertain. Qatar Airways, the hardest hit of the luxury Gulf carriers because its country has a big US Air Force base, sent several of its A380s to a Spanish airport used for long-term aircraft parking. \u201cYou would hazard that they will not return,\u201d predicts one industry executive. <\/p>\n

Some airlines have also announced radical action to prune loss-making routes. Already, Lufthansa has cut 20,000 flights over the summer as rising fuel prices make the services unprofitable. <\/p>\n

Even with newer planes, the industry faces billions in higher costs from its fuel bills. <\/p>\n

European carriers are largely hedged, using futures contracts to lock in prices and smooth out volatility. But they are still having to buy some fuel on the open market \u2013 and must now decide when to start taking out future hedges at higher prices. <\/p>\n

Many of the big US carriers gave up on hedging a decade ago, after racking up heavy losses betting against oil markets. This has left them fully exposed to higher prices, even though the US imports less kerosene from the Gulf than Europe or Asia. <\/p>\n

\"Doha,Doha, in Qatar, is a major air transit hub. Photograph: Alamy\/ AP <\/p>\n

Then, there is the question of whether the crisis will redraw the world map. In normal times, a third of air traffic between Europe and Asia passes through the Gulf\u2019s transit hubs such as Dubai or Doha. Before the conflict broke out, the region\u2019s airports were drawing up expansion plans that would see them add several Heathrows-worth of growth in the coming decade. <\/p>\n

Since then, direct flights between Asia and Europe have been completely full, even after steep price increases were introduced. <\/p>\n

\u201cI think what is turning out to be a great opportunity for us is customers that we did not have \u2013 or customers that we used to have \u2013 trying our service flying nonstop on routes where they may have been making connections before,\u201d said Smith, the Air France-KLM chief executive, in an earnings call.<\/p>\n

Once transit services restart, everyone in the industry expects Emirates, Qatar and Etihad to drop prices to convince travellers to return. <\/p>\n

This will put the rest of the industry into a bind. Match the price cuts, and hit a bottom line already under pressure from soaring costs. Or refuse to discount, and see passengers seep back towards the Gulf. <\/p>\n

\u201cThe draw of Dubai and the UAE has produced an economic operating model that is the envy of the planet,\u201d Emirates boss Sir Tim Clark told an aviation conference in Germany last month. \u201cOnce this is over … it certainly won\u2019t take much for Emirates to get back into the saddle.\u201d<\/p>\n

Not everyone is concerned. After all, handling the vagaries of the global oil market is part and parcel of running an airline. <\/p>\n

Prices are not unprecedentedly high, says Steve Saxon at McKinsey. \u201cEven at today\u2019s highs, fuel costs are lower in real terms than they were in the 2008 spike, and similar to 2011-12 levels.\u201d Airlines that are unhedged suffer more when costs rise, he adds.<\/p>\n

But the longer the conflict goes on for, the worse the situation will get for the industry. <\/p>\n

Analysts paint a bleak picture of rising costs that might send the industry into a downward spiral. <\/p>\n

If costs keep rising \u2013 and as airline hedges unwind \u2013 more and more routes will become unviable. Services will be cut, which will raise the fixed costs for the airlines, forcing them to raise prices even more to compensate, and deterring passengers. <\/p>\n

\"TheThe rising cost of living will impact on travel decisions. Photograph: Chris Maddaloni\/The Irish Times <\/p>\n

At the same time, a longer war that sees households struggling to cope with rising petrol and food prices will, eventually, have a knock-on impact on travel spending. <\/p>\n

\u201cYou get into that sort of dynamic which is not a good one for airlines … because you start to get more fundamental demand destruction,\u201d says one senior airline adviser.<\/p>\n

This does not augur well for the future of low-cost travel, particularly in Europe, where fierce competition and deregulation mean off-season tickets to fly across the Continent can sometimes cost as little as \u00a317 (\u20ac19.51). <\/p>\n

\u201cAs fares rise on the back of fuel costs, Europe\u2019s low-cost carriers will exploit their overall lower cost base, hedged fuel supply and cash balance,\u201d says Charlton of Aviation Advocacy. <\/p>\n

Premium airlines will cut their short-haul routes to favour long haul, he predicts, reducing the competitive pressure and leading low-cost operators to steadily raise prices. <\/p>\n

\u201cAs the legacy carriers continue to \u2018rationalise\u2019 their short-haul network, the low-cost carriers will be free to raise their fares, blaming the fuel price, to the point that the low-cost carriers risk litigation for misdescription,\u201d he says. <\/p>\n

For now, price freezes are in place for many of the budget carriers. Many have also come through crises before, and kept offering affordable flights. <\/p>\n

But all this is happening as the industry enters the all-important summer months, the harvest season when planes are fuller and months of winter losses can be overturned. <\/p>\n

\u201cWinter could be a different matter,\u201d says John Strickland, an aviation analyst. <\/p>\n

\u201cIf we maintain these high prices, which seems likely … given lower demand and tougher trading in winter, airlines could take a chance to be much more brutal about what they don\u2019t fly in the winter to compensate for the high fuel price,\u201d he says.<\/p>\n

Then, much steeper cuts to planes, routes and jobs might follow. If that happens, he adds, airlines will need to \u201cbatten down the hatches\u201d. \u2013 Copyright The Financial Times Limited 2026<\/p>\n","protected":false},"excerpt":{"rendered":"Helen Martin had just booked a dream honeymoon for clients of her travel agency: Singapore for several nights…\n","protected":false},"author":2,"featured_media":116182,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[40003,20801,11610,15160,40002,40001,10762,40005,34,11611,1484,40000,40004,101,4513,10142],"class_list":{"0":"post-116181","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-iran","8":"tag-aer-lingus","9":"tag-air-france-klm","10":"tag-british-airways","11":"tag-delta-air-lines","12":"tag-easyjet","13":"tag-emirates-airline","14":"tag-etihad","15":"tag-international-airlines-group","16":"tag-iran","17":"tag-lufthansa","18":"tag-qatar-airways","19":"tag-ryanair","20":"tag-southwest-airlines","21":"tag-strait-of-hormuz","22":"tag-united-airlines","23":"tag-wizz-air"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116582598918271962","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/116181","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=116181"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/116181\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/116182"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=116181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=116181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=116181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}