A JetBlue flight at John F. Kennedy International Airport in January 2018.
In a busy week for air travel news, a low-costEuropean airlinehas removed three Los Angeles routes from its summer schedule due to spiking jet fuel costs; Lufthansa also said it will shrink operations later this year; aEuropeanairports group warns of imminent fuel shortages due to the Iran war; new research from the U.S. Travel Association and Kayak shows sharply higher domestic and international air fares as summer approaches; some foreign carriers are tacking on fuel surcharges, and the cost of frequent flyer award tickets is also going up; higher fuel costs and rising debt burdens raise questions about the fate of Spirit Airlines andJetBlue; United reportedly floats the possibility of merging with American, but industry observers give it little chance; Delta plans even more expansion of premium seats on its widebody fleet; Alaska Airlines plans to add more intrastate service from San Diego next week and increase Hawaii capacity from Oakland; there’s international route news from Qatar Airways, United, Condor Airlines, Virgin Atlantic and Air France; a large premium passenger lounge atSFOhas rejoined the Priority Pass network.
Industry executives have been predicting that skyrocketing fuel costs would have a much bigger impact on low-cost carriers and heavily indebted companiesthan on legacy airlines, and a couple of reports this week suggest they are right. CNBC, citing “people familiar with the matter,” said that the troubled low-cost carrier Spirit Airlines — currently trying to emerge from Chapter 11 bankruptcy for the second time —could go into liquidation any dayand sell off its assets since spiking jet fuel costs have put its recovery plan into disarray. It said Spirit declined to comment on “rumors and speculation.” Meanwhile, View from the Wing reported this week that JetBlue founder David Neeleman, in leaked remarks he made to pilots at his current airline Breeze Airways, said that JetBlue is currently “in a really tough spot. He said a prominent Wall Street analyst predicted JetBlue is on track to lose $1.3 billion this year, and “that would probably put them, you know, into bankruptcy, I would assume.” Neeleman said that would increase JetBlue’s debt burden to $9 billion, at an annual cost of hundreds of millions of dollars in interest. While there has been speculation about United buying JetBlue, “I know it from pretty good source inside of United that they’re very concerned about JetBlue’s debt. And they’re not really interested in taking that on. So I think JetBlue has very few options,” he reportedly told the pilots.
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A pilot looks out of a cockpit in Berlin in November 2025.
So far, the Iran war and its doubling of jet fuel costs have led not only to higher fares but also reduced airline schedules. That second impact was initially seen in international flight schedules to the Middle East (obviously) and for some carriers’ operations in Asia and Europe, but now it’s coming to the U.S. As first reported this week by Ishrion Aviation, which tracks airline schedule changes, Europe’s low-cost Norse Atlantic Airways has decided toscrap its summer seasonal scheduleof nonstop transatlantic flights from Los Angeles, which are some of its longest and most fuel-hungry routes. Norse Atlantic hadpreviously plannedto fly from LAX to London Gatwick starting June 1, to Paris CDG beginning May 29 and to Rome effective May 30.
Meanwhile, Lufthansa this week released plans to shrink its operations, citing “significantly increased” jet fuel costs. The German carrier said when its summer schedule ends in October, it will remove six widebody long-haul jets (A340-600s and 747-400s) from its fleet and make additional winter schedule reductions equivalent to taking five aircraft out of service. Shrinking its overall capacity “is unavoidable in light of the sharply increased kerosene costs and geopolitical instability,” said Lufthansa Group Chief Financial Officer Till Streichert.
A Boeing 787 Dreamliner from Norse Atlantic Airways stands at the gate.
In another potential blow to international air travel, CNBC reported that Europe’s airports have issueda dire warning about their jet fuel suppliesif deliveries through the Strait of Hormuz continue to be disrupted. The trade association Airports Council International Europe sent a letter to European Union officials stating that “if the passage through the Strait of Hormuz does not resume in any significant and stable way within the next three weeks, systemic jet fuel shortage is set to become a reality for the EU.”
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Source: Drudge Report
