It appears that an increase in airfares is inevitable as a result of Trump’s conflict in the Middle East as his war continues to have a global impact on the cost of living which could rumble on well after a peace deal is reached.
The European Union does not expect a serious jet-fuel supply issue in the short term linked to the U.S.-Iran war, EU energy commissioner Dan Jorgensen told reporters and the director general of the International Air Transport Association, Willie Walsh, appears to agree.
“We don’t expect a very serious security of supply issue on a very short term. But we cannot exclude that there will be security of supply issues on a longer term. This all depends, of course, on the situation in the Middle East,” Jorgensen said.
According to the director general of the International Air Transport Association. Willie Walsh, airlines will not be able to continue “absorbing the cost” of disruption caused by the closure of the Strait of Hormuz in the long term.
He told the BBC there was no need to panic over potential jet fuel shortages, but warned rising fuel prices would inevitably feed through into higher ticket prices. He said: “There’s just no way airlines can absorb the additional costs they’re experiencing. There may be some instances where airlines will discount to stimulate some traffic flow… but over time it’s inevitable that the high price of oil will be reflected in higher ticket prices.
“I think the concern will be that if sufficient alternative supply isn’t sourced, there may be some shortages when we get into the peak summer period.” Today a surge in jet fuel prices from $85-$90 to $150-$200 per barrel amid the U.S.-Israeli war against Iran has blindsided the aviation industry, where fuel accounts for up to a quarter of operating expenses, forcing airlines to raise fares and revise their financial outlooks. And this will eventually lead to higher airfares between the UK and Spain and other holiday destinations.