When American low-cost carrier Spirit Airlines permanently ended operations on 2nd May, it sent shockwaves throughout the global commercial aviation industry.
While bankruptcy was the main reason why the airline terminated its run, the soaring price of jet fuel on the global market took matters beyond help in any form.
Everyone has been feeling the economic crunch fuelled by dwindling fuel supplies throughout the world as the West Asia conflict entered a fourth month and the Strait of Hormuz remains closed.
But global aviation companies are feeling it most keenly as both the astronomical cost of fuel and restrictions on airspace entry have impacted everyone’s bottom line.
A difficult way of coping
In the weeks since conflict erupted in West Asia, we have seen a number of airlines, both low-cost and full-service, cutting down on the number of flights in operation.
As of press time, it is estimated that 12,000 flights or around two million seats have already been removed from global schedules in a bid to conserve fuel.
AirAsia founder Tony Fernandes recently expressed his own shock over the matter, declaring in an interview with the Financial Times: “I thought I’d seen it all with COVID. But, seeing jet fuel go up almost three times, this is much worse. You wake up one day and your major cost has tripled. It was quite a new experience for me and I’ve been through a lot in my life.”
This has, unfortunately, resulted in a significant increase in plane fares since the beginning of March 2026.
Interestingly, this has driven many people who would normally book low-cost flights to consider getting aboard full-service options in a bid to get their money’s worth.
Could other airlines suffer the same fate as Spirit?
The quick answer to this is that it is highly likely as low-cost carriers struggle to cope under current circumstances.
A more insightful answer would be that it would depend on which region we’re talking about.
Juliana Lu of the Business Times is somewhat pessimistic regarding the Asian low-cost aviation sector, citing economic issues currently plaguing the region.
As she puts it: “Southeast Asia is home to a number of budget carriers that did not hedge when crude prices were low, meaning they must now pay the market rate. Airlines had started the year expecting cheap aviation fuel, their biggest single expense. Malaysia and Thailand also had resurgent currencies, which makes the commodity more affordable because it is denominated in US dollars. But that was before the Iran conflict began in February."
Since then, the price of jet fuel in Singapore hit a high of over US$200 per barrel, while the crack spread ( essentially the difference between the price of fuel and the crude oil used to refine it) surged over US$100 per barrel just last week.
Lu added: "Asian currencies are also weakening against the greenback, in part because of the energy crisis, further reducing their buying power.”
Likewise, other regional experts opine that even the best-performing low-cost carriers throughout Southeast Asia will be challenged to sustain operations in the face of skyrocketing fuel costs.
AirAsia’s Fernandes, on the other hand, sees a frisson of hope despite the crisis; as he put it, Asian airlines are in a better place operationally thanks to the still-robust demand for regional travel.
Fernandes said: “The most important thing is that demand has not dropped in Asia. If anything, geopolitics is causing more Asians to stay in our part of the world as opposed to venturing outside. The Gulf capacity has been taken out and there is a massive increase in price to Europe, which has driven more traffic to our side.”
In the meantime, experts in global commercial aviation believe that governments ought to offer their respective carriers a modicum of financial relief to tide them over till the crisis wanes.
Perhaps this would be the best course of action: with the summer peak travel season coming up, people are still jonesing to travel, crisis or no crisis.
