Soaring fuel prices could see airlines ground flights in off-peak season

RYANAIR and Aer Lingus will ground aircraft this winter to combat rising fuel costs as Irish businesses are warned closures and job cuts are looming.

Merrion stockbrokers said assuming oil prices remain around $127 a barrel, few airlines in the western world will be profitable with fuel costs at this level without material increases in fares.

It said this is a significant development for the industry, and as a result it expects airlines such as Ryanair and Aer Lingus to reduce capacity in off-peak season as such frequencies will be loss-making, even on a marginal cost basis.