In 2022, as a discerning journalist with insight, I wrote an article about discount carriers, the great winners of the crisis. And even if I already noted a few limits, such as addressing climate change and inflation, three years later, that article has aged very poorly!
Spirit Airlines at that time stood as an outsider in the American market. The airline displayed ferocious growth, almost unassailable. Its capacity had risen, despite rock-bottom fares, from 6 million to 48 million seats, a few months before its spectacular bankruptcy.
At the same time, legacy carriers were searching for a future. They found their salvation on the United States side, which allowed them to erase billions in losses without losing their planes or their skills, while the low-cost carriers weathered the storm.
It was certain, the low-cost model would impose itself everywhere, even if long-haul already showed its limits…
Four years later, this announced conquest increasingly resembles an episode of Minus and Cortex, remember, those two laboratory mice who imagined, every evening, taking power.
From a low-cost model that set out to conquer the world…
Sunday evening, I invited my daughter to sit on my lap, not to tell her about the blessed time of Minus and Cortex, but to tell her about a blessed era when it was possible to explore Europe for the price of two cartons of milk at Biocoop.“You see, my little Gab, in 2012, I went to Rome from Beauvais Airport, after waking at 1 a.m. and driving four hours from Caen, for only 40 euros round trip. A world you will probably never know, and in a way, it’s better that way.”
She opened her eyes wide and asked me if, with 40 euros, she could get a lot of candies. End of story. Let’s go back a little further.
The low-cost model was born in the United States, in the 1970s. It took about a decade to cross the Atlantic and, a decade later, Ryanair asserted itself in the skies of the Old Continent, the very place where people say you cannot undertake.
Its revenue rose from €231 million in 1998 to around €13.44 billion in 2024. Its fleet comprises 647 aircraft. I am simply talking about the 5th airline in the world, in terms of capacity.
Its boisterous CEO, Michael O’Leary, has made imitators.
According to Eurocontrol, the several dozen low-cost carriers represented 35.4% of all flights in its 42 member states in 2025, against 34.7% for traditional carriers.
The shift has been made.
Furthermore, the low prices keep selling! Year after year, the Irish company posts insolent results, such as its record net profit of €2.26 billion last year, a margin roughly twice that of Air France or Lufthansa.
To a Fragile Model!
Well, it’s a rough summary; we’ll see more as we go. In February, emboldened by his longtime political and military ally, Benjamin Netanyahu (Prime Minister of Israel), the American president decided to strike Iran.
The conflict was supposed to last only three weeks… it is now seven months in and no one sees an end. And if Iran stands on the brink of civil, economic and military chaos, the regime holds its ground and plays its strategic position to target neighboring countries, but above all to close the Strait of Hormuz.
Immediately, the price of oil shot up to astronomical levels. Last week, according to IATA, the price of kerosene surged again, by 9%. Over a year, the increase reaches 90%.
You immediately understand that the entry prices of 19 or 29 euros offered by low-cost airlines are under heavy pressure.
“Fuel accounts for between 20 and 40% of an airline’s costs. It depends on the type of business model.
Thus, for a low-cost carrier, fuel remains, in general, the first line item of expenditure. When the price of a barrel rises by 50%, your costs therefore rise by 15%“, as explained to us, in a previous piece, by Paul Chiambaretto, the director of the Pegasus Chair.
These magnitudes are now nearly twice as large for the entire year 2026.
On top of that, erratic demand. European citizens are questioning the consequences of this conflict on their short- and medium-term lives. Travel becomes less of a priority. Airlines had to, as summer approached, keep prices low to fill their planes.
Volotea in Serious Trouble and Ryanair Announces a Surge in Fares
On its side, Volotea informed its French pilots, who were striking, that it must cut back its activities at numerous French bases due to the soaring kerosene costs.
In their latest report, the Spanish accountants for the low-cost airline wrote there is a “significant uncertainty regarding the continuation of the company’s operations,” while its equity, negative by 77.5 million euros, could “lead to dissolution for commercial reasons.”
A rescue plan is put in place in 2026. Volotea found €71 million from its shareholders, but it had initially hoped for €100 million.
It has also reached an agreement with its creditors to defer payments totaling €49.3 million. Negotiations are also underway to obtain an additional €25 million in financing, through loans.
Volotea weakened, easyJet acquired and Ryanair… rebusiness modeled!
Regarding the latter, its boisterous CEO recently stated that if oil prices stay high until next year, I think there will be a significant rise in airfares.
The Irish carrier saw its profits drop by 34% in Q1 2026. And, given last-minute bookings, as well as promotions needed to stimulate the market, this dynamic could persist.
