Xinhua
10 Nov 2026

WARSAW, Nov. 10 (Xinhua) -- European airlines are entering the winter season with reduced flight schedules and more cautious expansion plans, as soaring fuel prices add to the financial pressures facing an already challenging industry.

The adjustments reflect airlines' growing efforts to contain costs and protect profitability, with potential implications for airfares, employment and the industry's longer-term competitive landscape.

WINTER CAPACITY PLANS SCALED BACK

According to OAG, a global travel data provider, 21 European airlines have cut their planned winter capacity by more than 5 percent amid changing market conditions, high oil prices and potentially waning consumer confidence.

Air France-KLM said Thursday that it now expected capacity to grow by around 2 percent in 2026, down from its previous forecast of 2 to 3 percent.

Ryanair has lowered its annual passenger target from 216 million to 214 million, while British budget carrier easyJet has removed around 1.4 million seats from its winter schedule. Lufthansa Group is cutting short- and medium-haul capacity equivalent to five aircraft at its core airline.

Some carriers have gone beyond scaling back capacity, scrapping previously announced services on routes that have become less commercially viable.

Poland's LOT has suspended its Krakow services to Madrid, Rome and Barcelona for the winter season, despite initially planning to operate the routes year-round.

Lufthansa subsidiary Eurowings has cancelled its planned winter flights from Cologne and Stuttgart to Dubai, just weeks after announcing the services in its winter schedule.

TOUGHER OPERATING CHOICES

Jet fuel prices in Europe averaged 4.84 U.S. dollars per gallon in October, their highest monthly level since the onset of the Middle East crisis and 114 percent above pre-crisis levels, according to the European Organization for the Safety of Air Navigation (Eurocontrol).

The financial pressure was evident in the latest airline earnings.

Ryanair reported that its net profit fell 15 percent year-on-year to 2.15 billion euros (about 2.4 billion dollars) in the first half of its 2027 financial year.

The airline has hedged around 80 percent of its fuel requirements through March 2027, leaving the remainder exposed to much higher market prices. It said its winter capacity cuts would help limit its exposure to higher fuel costs on the unhedged portion.

International Consolidated Airlines Group (IAG) reported Friday that its fuel costs rose 30.4 percent year on year in the third quarter, even after hedging. Its operating profit before exceptional items fell nearly 16 percent, as revenue growth failed to offset higher fuel expenses and operational disruptions.

Air France-KLM said higher fuel prices added 436 million euros (about 486 million dollars) to its costs in the third quarter compared with the same period last year, even after hedging.

While fuel hedging provides some protection against price volatility, airlines differ in their ability to pass higher costs on to passengers.

IAG CEO Luis Gallego said Friday that British Airways was expected to achieve around 100 percent pass-through of its additional fuel costs this year, but that the same would not be possible on more competitive intra-European routes.

Such differences in pricing power are among the factors shaping airlines' capacity decisions, as carriers scale back less profitable services and focus resources on markets offering stronger returns.

John Grant, chief analyst at OAG, noted that when airlines drew up their original winter schedules a year earlier, the U.S.-Iran-Israel conflict had yet to erupt, oil prices were lower and consumer confidence was stronger.

Operating decisions are also influenced by taxation and airport charges. Ryanair has announced cuts to 20 routes and 1.1 million seats in Belgium, citing higher aviation taxes, and said it would reallocate aircraft to lower-cost markets.

HIGHER FARES AND INDUSTRY RESTRUCTURING

The cost pressure is increasingly being passed on to passengers.

Lufthansa CEO Carsten Spohr said he expected airfares to rise by a double-digit percentage in 2027. Ryanair CEO Michael O'Leary warned in October that European airfares could increase by 10 to 20 percent over the following 12 months, potentially marking the biggest fare increase in the region's aviation history.

A study released in October by consultancy Oxera, based on European flight pricing data from 2023 to 2025, found that an airline's withdrawal from a route was associated with a 9.7-percent increase in fares, highlighting the influence of competition on ticket prices.

The pressure is also prompting airlines to reassess their longer-term investment and workforce plans.

KLM announced Thursday a major restructuring aimed at improving its annual earnings by 1 billion euros (about 1.11 billion dollars).

The Dutch carrier plans to reduce its workforce by nearly 15 percent over the coming years through restructuring, outsourcing and other organizational changes. It will also revise its European fleet plans, replacing previously planned Airbus A320 aircraft with smaller Embraer E195-E2 jets to better align capacity with demand.

Brussels Airlines has abandoned plans to add two Airbus A330 aircraft in 2027 and will not use additional wet-leased aircraft next summer, citing weaker-than-expected profitability, repeated strikes and geopolitical uncertainty. The carrier is maintaining a cautious approach to expansion despite reporting record third-quarter earnings on Tuesday.

Latvia's airBaltic confirmed plans to lay off approximately 100 pilots and 200 cabin crew as part of adjustments to its flight schedule and a broader financial overhaul.

Meanwhile, Wizz Air has announced plans to eliminate 172 positions in its Romanian operations, citing high fuel costs alongside inflation, weakening demand and increased competition.

The difficult operating environment could also accelerate industry consolidation.

IAG CEO Gallego noted that difficulties faced by some airlines were creating opportunities for consolidation, adding that certain carriers had approached IAG about potential cooperation.

Croatian economic analyst Damir Novotny told Xinhua that a decade of relatively low fuel prices had boosted passenger numbers and air traffic but had also put considerable pressure on airlines, forcing some to exit the market.

He expects further consolidation in the coming years, with unprofitable airlines likely to disappear and ticket prices to rise as operating costs increase.

As elevated fuel costs continue to test airline profitability, the choices carriers make on capacity, pricing and restructuring could have lasting consequences for European aviation beyond the current season, shaping not only air travel costs but also employment, connectivity and competition.