Hi everyone, if you’ve been watching this channel, you’ve seen me talk about the problems hitting the airlines. Spirit Airlines closing up wasn’t just a loss for comedians, it was a huge loss for consumers and the employees of the company. Surging fuel prices have been causing plane ticket prices to rise since March, not to mention the cost to fill your gas tank. If you’ve been diligently watching airfare and tracking flights for your next trip, you likely haven’t been receiving the news that you’ve been hoping for and I’m… not about to make you feel better. With that, let’s get into some of the most recent developments in the air travel industry as we slide into this year’s holiday season.
Smaller Airlines Going Under
Spirit isn’t the only airline collapsing under these economic conditions. Smaller airlines generally don’t have as much wiggle room when it comes to overhead and finances. They often service smaller, less profitable routes, and as a result they are more susceptible to major changes in the market, like the ones we’ve seen in fuel costs. A lot of small, regional airlines, which will often operate under a larger company’s name, have been shutting down over the last six months because of rising costs.
In a sure sign of the stress hitting the airline industry, AirBaltic, the Flag Carrier line of Latvia (yes, the country), has filed for Chapter 11 bankruptcy protections in New York. They cited fuel prices doubling since the war with Iran started in late February. That’s not all they cited, though. The airline also highlighted a growing shortage of aircraft engines, which exasperated the debt that it was already carrying.
While AirBaltic isn’t shuttering the whole company like Spirit, it is shrinking its fleet, cancelling orders, and reducing its least profitable routes. It states that by the end of 2026, its fleet of 54 Airbus planes will be brought down 36 by the end of the year. If you have a flight with AirBaltic, however, know that it isn’t cancelling any tickets at this time.
Airfare Prices are going to be impacted by engine shortages, no matter what plane you book your flight on.
As an aside, that engine shortage isn’t new and there’s reporting going back to 2024 on how engine maker Pratt and Whitney is struggling to keep up with demand for new units and repairs among supply chain problems. The engine that they are struggling to keep up with is the Geared TurboFan used widely in the A320 family, the most delivered jet in history. This probable is impacting other lines as well.
A similar state-owned airline, Congo Airways, has been shutdown since 2024 due to debt and, pretty importantly, a lack of safety. While they completely missed their 2025 restart date, they are still trying to restart sometime before the end of the year.
What all these smaller lines shutting down, reducing service, or just not functioning means is that there are less planes filling in those smaller, unprofitable routes. Now, if you’re thinking, “Well, that sounds bad but I don’t fly smaller airlines, I fly the major carriers,” well I wouldn’t get too excited just yet because you probably do and haven’t noticed.
If you’ve ever bought a ticket from a major airline and seen in the small details of the flight, like the number or aircraft type, “this flight serviced by Company-Name-You’ve-Never-Heard-Of-Airlines”, that means a regional company is running the route for the major airline you booked through, and those companies have been folding at an accelerated rate. No matter where you are, all these companies closing the doors is likely to impact you.
FAA Pushing AI
The Federal Aviation Administration has been pushing for an artificial intelligence tool to manage flight scheduling. However, it was only described in the vaguest terms about what it would do and how it would do it, saying it would “offer advice to air traffic controllers”. There was significant industry pushback on the idea of an undefined AI system, called the Strategic Management of Airspace Routing Trajectories, or SMART system, telling these companies how air traffic management would be handled. In the last few weeks, there have been a number of long meetings with the FAA, and reporting is that rather than providing any answers, the airline officials were left with more questions.
The primary concern among the airlines is that this AI tool will add an extra layer of noise onto the already understaffed and overwhelmed air traffic controllers that have been the subject of firings and resignations during the various government shutdowns in the last few years.
The folks working in this tower are under a lot of pressure. Technically this is in Bogata, so not really directly impacted by the FAA’s work, but it’s a nice looking tower.
Earlier this month, there was a big meeting between the CEOs of the airline companies and the FAA, which looks to have caused the FAA to quote, “narrow the scope”, of the AI tool down to more of a recommendation system and providing alternative routing options to reduce bottlenecks, rather than being integrated directly into day-to-day traffic management.
It is currently set to be tested out in three airports that serve the Washington DC area.
Holiday Airfare Pricing
For all of you that have been anxiously planning your holiday travel, watching the rising cost of plane tickets, I don’t have great news. While oil prices surged in spring with the Iran War beginning, and then again in the summer, oil prices have broken over $100 a barrel this September. According to the Bureau of Labor Statistics, airfares from August 2025 compared to last month had risen 23%.
All this is to say, be prepared for a rough holiday travel season. Not only are the smaller regional flights disappearing, but airline executives at the Morgan Stanley Laguna Conference said they were prepared to raise ticket prices and cut less profitable routes going into the holidays in order to offset these increased fuel prices.
Airfare prices are only going up,,,
Executives from across the airline industry are, essentially, saying that prices are going up, availability is decreasing, and demand is staying steady. All of that translates into increased prices in every aspect of travel. Even cheaper flights, those extra fees they tack on for things like checked bags have been increasing. Recently, I personally saw a checked bag fee hit $200 for a single bag on a transatlantic flight.
While we don’t know, for sure, how it’s all going to shake out this season, be prepared to not see prices and fees improve anytime soon.
Are you planning out your holiday travel before things get pricier? Well, as you might have guessed we are a travel agency and if you are looking to book a trip to a resort, take a cruise, or just get away for a few days we can help with that! Each year we book hundreds of vacations for individuals, families, and large groups. We’ve got years of experience and firsthand knowledge to make sure you get the best trip possible with support all along the way. Our team of travel professionals can help find and book the best rates and discounts for your trip because it’s our job. So don’t book on your own, use our expertise and book with us so we can help get you, far far away.
