Europe airfares set to rise amid high jet fuel costs
Europe airfares set to increase as the cost of jet fuel remains high following the conflict involving the US, Israel, and Iran. The head of the International Air Transport Association (IATA) has indicated that higher ticket prices for air travellers in Europe are inevitable due to sustained elevated oil prices.
Impact of Middle East conflict on jet fuel supply
The closure of the Strait of Hormuz, a key route for oil shipments, has significantly affected jet fuel prices and raised concerns about potential shortages. Europe, particularly the UK, relies heavily on imports from this region and has been seeking alternative fuel supplies. The European Union recently stated that US-grade jet fuel could be used by European airlines if introduced carefully, aiming to ease supply pressures.
Despite these efforts, the IATA chief, Willie Walsh, highlighted ongoing concerns about fuel availability in the UK during the summer peak travel months. He explained that flight and fuel demand typically increase by about 25% in July and August compared to earlier months, which could lead to shortages if alternative supplies are not secured.
However, Walsh emphasized that there is no need for panic and that widespread flight cancellations can be avoided. The UK government also confirmed that airlines are not currently experiencing jet fuel shortages and that fuel suppliers maintain stocks to support resilience.
Airline responses and future outlook
Some European airlines have recently reduced fares to attract passengers amid lower demand, but Walsh stated that this is not sustainable. Airlines cannot continue to absorb the higher fuel costs indefinitely, and ticket prices are expected to rise over time to reflect these expenses.
Walsh noted that disruptions to crude oil supplies and damage to refining infrastructure in the Gulf region mean that even if the Strait of Hormuz reopens soon, fuel prices are unlikely to decrease quickly. The situation is expected to persist for several months and possibly into the following year.
The UK government is working with the aviation industry to maintain flight operations and is consulting on measures to help airlines plan realistic schedules to avoid last-minute disruptions and protect holiday plans.
