Warning higher Europe air fares 'inevitable' due to Iran war

Airfares in Europe are expected to rise due to soaring jet fuel costs linked to the ongoing conflict in Iran and the closure of the Strait of Hormuz, a critical transit route for fuel supplies. Willie Walsh, head of the International Air Transport Association (IATA), warned that higher ticket prices are unavoidable as airlines cannot indefinitely absorb the increased expenses. While some European carriers have recently lowered fares to stimulate demand, Walsh emphasized that this trend is unsustainable, especially with the summer travel peak approaching. The UK and Europe heavily depend on jet fuel imports passing through the Strait of Hormuz, and disruptions have forced efforts to secure alternative sources. Although the EU has approved the cautious use of US-grade jet fuel to ease supply pressures, concerns remain about potential shortages during the busy summer months. Walsh highlighted that the UK faces particular risks due to the expected 25% rise in flights and fuel consumption in July and August compared to earlier in the year. Despite these challenges, he reassured that panic is unwarranted and widespread flight cancellations can likely be avoided. Government officials and industry leaders, including the EU’s energy commissioner and Tui’s CEO, have downplayed the immediate risk of fuel shortages but acknowledge that longer-term supply issues cannot be ruled out. The increase in jet fuel prices has already led to noticeable hikes in long-haul flight costs, while some European fares have temporarily decreased amid weak demand. However, airline executives maintain that sustained fare reductions are not feasible given the persistent rise in operational costs. The situation underscores the vulnerability of European aviation to geopolitical tensions affecting energy supply routes. With the summer travel season imminent, the industry faces a delicate balancing act between managing fuel availability and controlling ticket prices, which will have significant implications for travelers and airlines alike.