Fuel prices starting to bite LCCs?

[dajop]

A couple of LCC cancellations.

This evening my partners' Jetstar flight SIN-MEL (the infamous JQ8) for mid-late May was cancelled and his booking moved 7 hrs earlier via PER, with a four hour layover in PER.

Then a couple of hours later my Scoot flight SIN-MEL for mid May (four days earlier) was cancelled and my booking moved 9 hours earlier.

At first I thought it was just another typical JQ7/8 issue. But now I am thinking this is the fuel price is really starting to bite and will see more of this - LCCs rationalising their flying.

 

[offshore171]

this is the fuel price is really starting to bite

Feels like we've moved beyond the fuel price issue, and now into the fuel supply/availability problem.

 

[AuSammy]

Feels like we've moved beyond the fuel price issue, and now into the fuel supply/availability problem.

Curious. Based on what info?

 

[Saab34]

Seems like everyone is trimming some May capacity. I see Jetstar has pulled back SIN, SGN, HKT. Scoot has pulled two frequencies per week for May.

Scoot PER-SIN 14 to 12 weekly
Scoot MEL-SIN 10 to 8 weekly
Scoot SYD-SIN 14 to 12 weekly

AirAsia MEL-KUL 7 to 5 weekly
AirAsia SYD-KUL 7 to 5 weekly

Batik is moving its BNE-DPS to 4 weekly for the coming months from mid April, and it’s Melbourne service will move to 4 weekly for the back half of April.

Indonesia AirAsia moving its new Melbourne flight to 4 weekly for May.

Cebu moving Melbourne to 4 weekly and Sydney to 5

Virgin has trimmed NAN also it seems a mix of 3/4 weekly.

No doubt many other trims out there.

 

[AuSammy]

Seems like everyone is trimming some May capacity. I see Jetstar has pulled back SIN, SGN, HKT. Scoot has pulled two frequencies per week for May.

Scoot PER-SIN 14 to 12 weekly
Scoot MEL-SIN 10 to 8 weekly
Scoot SYD-SIN 14 to 12 weekly

AirAsia MEL-KUL 7 to 5 weekly
AirAsia SYD-KUL 7 to 5 weekly

Batik is moving its BNE-DPS to 4 weekly for the coming months from mid April, and it’s Melbourne service will move to 4 weekly for the back half of April.

Indonesia AirAsia moving its new Melbourne flight to 4 weekly for May.

Cebu moving Melbourne to 4 weekly and Sydney to 5

Virgin has trimmed NAN also it seems a mix of 3/4 weekly.

Would be interesting to know if it is a reaction to projected costs of aviation fuel, reduced forward bookings due to economic uncertainty because of the war, or already planned seasonal or competitive changes

 

[Harrison_133]

Virgin has trimmed NAN also it seems a mix of 3/4 weekly.

That's a normal trim for VA to NAN during that period. The frequencies they currently have on sale for May 2026 are exactly the same as what they've offered for the past 2 years.

 

[LionKing]

A couple of LCC cancellations.

This evening my partners' Jetstar flight SIN-MEL (the infamous JQ8) for mid-late May was cancelled and his booking moved 7 hrs earlier via PER, with a four hour layover in PER.

Then a couple of hours later my Scoot flight SIN-MEL for mid May (four days earlier) was cancelled and my booking moved 9 hours earlier.

At first I thought it was just another typical JQ7/8 issue. But now I am thinking this is the fuel price is really starting to bite and will see more of this - LCCs rationalising their flying.

Airline seats without Business Class, which charges 3 times more than Economy Seats, will not be able to withstand jet fuel price which jumped 100%.

I would expect more reductions of LCC services and I think we will see some Asian and European LCCs folding soon if Jet Fuel price persists for longer. With such high fuel price, the breakeven point for some services may go beyond the total number of seats they are offering.

Furthermore, LCC market is shrinking as Premium Markets is expanding:

https://www.theaustralian.com.au/business/aviation/premium-cabins-grow-at-the-expense-of-economy-class-delivering-bumper-airfares/news-story/9d7ad48bd4a22a595370a693fc04a657

Honestly I don't understand why we need that many LCCs in our market anymore. Perhaps airlines should invest much more into Business Class to maintain profitability.

 

[Saab34]

Honestly I don't understand why we need that many LCCs in our market anymore. Perhaps airlines should invest much more into Business Class to maintain profitability.

The issue for LCCs is the cost overhead benefit they once had has been reduced over time, especially in high cost environments like the West. Everything today is costly be it ground handling, crewing, engineering, leasing, really isn’t much giving the low costs much advantage anymore. Mainline carriers have pulled costs out during recent shutdowns, and are not as fat as they once had been. This has been evident in the US.

LCCs with huge market share (Ryanair) or a monopoly (Jetstar Australia, Scoot) will continue to do well in the space.

Most LCCs in Asia have questionable balance sheets so remains to be seen how long some can push through this if it drags on.

 

[moa999]

Particularly those who don't hedge.
They've got the pain of cheap forward bookings as well.

Business Class is not necessarily a panacea, you've still got to operate on routes where there are enough customers willing to pay the premium.

 

[Saab34]

Most in Asia are not hedged. AirAsia group does not hedge according to Bloomberg this week. No Philippine carrier is hedged either.

The survival of some will likely be a matter if crude does indeed fall through the floor once things start to ‘stabilise’, or simply remains high for a longer period.

AirAsia X, Cebu, Lion running these long haul low cost widebodies will be in for some pain.

 

[dajop]

I suspect the long haul operations will really suffer. Short haul LCCs or short haul divisions of LCCs might fare OK if not dragged down by their long haul ops. But in countries where labour costs and fares are lower fuel makes up a bigger proportion of the cost it could, naturally be difficult. Scoot, Jetstar, Zip, Air Japan might be better positioned with strong parent airlines, but their long haul proposition would be challenging. Perhaps the exception on long haul is Scoot’s Europe routes … where there might be a bump on the revenue side to offsite higher fuel prices due to people avoiding the ME3. But that could well be short term.

 

[dajop]

Oh, back on the topic of the cancellations, Scoot was way better than Jetstar.

Scoot - choice of refund to original form of payment, OR voucher to the value of 120% of what was originally paid OR any flight with same origin/destination within 14 days (+/-) of the original travel date.

Jetstar - Take what we give you or get a refund. When pushed they said they could offer to travel next day - but there is no flight scheduled the next day. Going to try again to see if they'll budge on flying a day earlier.

I don't think either offer seats on the parent company flights, JQ said no, but I am going to call Scoot to test the waters. Worst they can do is say no.

This has only re-inforced my pro-SQ anti-QF prejudice.

 

[moa999]

Also flew Scoot SIN-SYD a couple of weeks ago, and was seemingly downgraded from 789 to 788 some time in the 24hrs before.
I was in 3A so no impact but heard some chat from Row 4, who equally seemed not to have been advised of any refund.

Was on the day TR12 flight, and the single (very small) meal definitely wasn't enough for such a long flight.