Global airlines could face more bankruptcies and consolidation this year as soaring jet fuel prices driven by the Iran war push budget carriers to the brink, the head of the global airline body warned on Saturday.
Budget Carriers Bear The Brunt International Air Transport Association Director General Willie Walsh told Reuters that he expects some airlines to go out of business and others to be acquired by larger carriers.
"Unfortunately, I think there will be some carriers that will find this high fuel price very difficult to cope with," Walsh said at IATA's annual summit in Rio de Janeiro.
According to Reuters, budget carriers are absorbing the sharpest hit, lacking the higher-margin revenue streams such as premium cabins, high-yield travelers and credit card loyalty programs that larger airlines use to offset rising costs.
Spirit Airlines collapsed last month, and Walsh said it will not be the last, with route cuts on unprofitable flying expected and fares unlikely to soften soon.
