High fuel costs were key to the collapse of Norwegian carrier Flyr, according to analysis by IBA, which said it expects more airlines to fail in the coming weeks.
"Jet kerosene prices remain very elevated at $1,153 per metric tonne, in part due to a very wide crack spread caused by a lack of refinery capacity," IBA said, pointing to the 2008 global financial crisis as the last time such high prices were recorded. Weaker players were forced then to exit the market, a scenario the company sees as likely to recur in 2023 and give other airlines "more pricing power" as they try to cover high fuel prices.
IBA said the Flyr collapse, which came within days of Flybe also failing, showed the difficulties in remaining "cashflow positive" in winter and when oil prices are high, making recent positive results reports by carriers such as Ryanair all the more impressive.