Budget carrier Transavia plans major savings amid rising fuel prices

Dutch budget carrier Transavia is preparing a major cost-cutting drive as it seeks to sharply improve profitability amid rising fuel expenses and ongoing Middle East tensions, the airline said.

The airline, which has struggled with weak margins and repeated net losses in recent years, said it currently earns just one cent in gross profit for every euro of revenue, Dutch broadcaster RTL reported on Friday.

The savings are intended in part to fund fleet renewal, as the carrier replaces Boeing 737 aircraft with Airbus A321neo models, which are more fuel-efficient, quieter, and offer higher passenger capacity.

However, the airline is facing significant pressure from elevated jet fuel prices, driven by geopolitical tensions in the Middle East and disruptions affecting key shipping routes, including the Strait of Hormuz.

Fuel remains one of the largest operating costs for airlines.

Transavia said it aims to reduce costs by an additional €10 million ($11.6 million) to offset rising kerosene expenses and avoid fully passing higher prices on to customers.

Measures under consideration include closer operational cooperation with Transavia France and reducing reliance on external staff.

The airline confirmed that jobs will be affected but said it hopes to manage reductions mainly through natural attrition, such as not replacing departing employees.

It declined to specify whether compulsory layoffs will occur, noting that any potential job losses would primarily affect head office staff.

Regional tensions have escalated since the US and Israel began a joint military campaign against Iran on Feb. 28, triggering retaliation from Tehran against Israel as well as US allies in the Gulf, along with the closure of the Strait of Hormuz.