The head of the International Air Transport Association (IATA) said on Saturday that surging jet fuel prices driven by the war in Iran are likely to push more airlines into bankruptcy and trigger further industry consolidation over this year and next.
اضافة اعلان
Global airlines are facing skyrocketing fuel costs due to the war waged by the United States and Israel against Iran. The conflict has cut off jet fuel supplies and disrupted key flight paths, forcing carriers to take expensive alternative routes.
Low-cost carriers (LCCs) have been among the hardest hit, as they lack higher-margin revenue streams such as premium cabins, high-income travelers, and credit card loyalty programs.
IATA Director General Willie Walsh said the effects of these pressures are already becoming visible, noting that the American budget carrier Spirit Airlines collapsed last month, and it will not be the last.
"Unfortunately, I think some airlines are going to find it very difficult to deal with these higher fuel prices," Walsh said at IATA's annual summit in Rio de Janeiro, adding that he expects some airlines to go bankrupt and larger carriers to acquire smaller ones.
However, Walsh stated that these pressures do not signal the end of the low-cost carrier model, which continues to thrive outside the United States, where the "Big Three" airlines—United Airlines, Delta Air Lines, and American Airlines—are squeezing budget competitors out of the market.
"I don't see that the low-cost model is broken; quite the contrary," Walsh continued, pointing to the strong performance of Europe's Ryanair as a prime example.
(Reuters)
