Popular airlines such as Ryanair, Lufthansa and KLM are cutting back on the sale of low-cost tickets, citing an unusual rise in fuel prices despite demand for travel at an all-time high, which has raised concerns about the future of low-cost flights in Europe.
A new study by Allianz Trade concludes that the current problems in the travel industry will not pass anytime soon. According to this its statistics, the cost of air travel alone will increase by another 21 percent in 2022, making both domestic and international travel even more expensive than it is today.
Even the recent price adjustments will “not be enough” to keep some airlines from going bankrupt, according to Allianz.
Specifically, the report says that while revenues are expected to increase 102 percent year-over-year, this will not be enough to prevent a “third year of losses.”
Airlines such as Lufthansa, KLM and ultra-cheap Ryanair have curbed sales of their cheapest tickets, underpinning the findings and showing that these estimates have real-world implications. Thousands of travelers who had hoped to fly cheap this summer will now be further impacted by the unforeseen change.
While Lufthansa’s low-fare restriction lasted only a few days, giving travelers affected by the cancellations enough time to rebook their flights, other airlines, such as KLM, have kept their higher-than-average costs, with no indication that they would ever return to pre-2022 levels. Round-trip tickets from London to Amsterdam were roughly $850 on June 8.
Ryanair CEO Michael O’Leary has said that the low-cost airline model is “unsustainable” for the foreseeable future. He indicated that the era of incredibly low fares in Europe would come to an abrupt end sooner rather than later.
In response to the escalating cost of international travel, O’Leary expects the typical low-cost airline fee to increase by 50% by 2025, starting at €60. Before 2022, if you bought a Ryanair ticket for up to €60, you could definitely take advantage of the Plus fare, which included priority seat assignment and a 20-kilogram check-in bag. That’s over.