Airlines are being hit by climbing fuel and labor costs, driving up ticket prices and added fees for travelers already navigating a shaky economy, reports Axios.
A looming jet fuel shortage in Europe and Asia could compound the Iran war’s impact on world travel within weeks if a fragile agreement to reopen the Strait of Hormuz collapses, making higher airfares and flight cancellations even more likely as the summer travel season approaches.
In a sign of the conflict’s ongoing repercussions for travel, Air Canada said Friday it planned to suspend its service to New York’s John F. Kennedy International Airport from June 1 until Oct. 25 to lower its fuel costs.
Other airlines, ranging from U.S. carriers like United and Delta to Air France-KLM, SAS, Philippine Airlines, and Cathay Pacific in Europe and Asia, have reduced routes and either increased ticket prices or said they would hike them if the war keeps oil from passing through the Strait of Hormuz.
"It’s very hard for the airlines to make predictions in this environment, so they’re going to be conservative, and that’s why it’s likely that their prices will remain elevated for some time until things really stabilize," said Shye Gilad, a former airline captain who now teaches at Georgetown University’s business school.
United Airlines CEO Scott Kirby has reportedly floated a controversial mega-merger with American Airlines as the industry faces mounting strain, while Spirit Airlines is said to be nearing liquidation after filing for its second bankruptcy in less than a year in November, reports Axios.
At the same time, Southwest and other carriers are cutting less-profitable routes, and Delta Air Lines CEO Ed Bastian indicated Tuesday the airline will need to "find ways" to pass rising jet fuel costs on to consumers.
Crude oil prices plunged Friday after Iran’s foreign minister said tankers and other commercial vessels could again pass unimpeded through the narrow waterway off the country’s coast that serves as a conduit for about one-fifth of the world’s oil and natural gas.
Jet fuel — a refined kerosene-based oil product — is airlines’ biggest cost, making up about 30% of overall expenses, according to the International Air Transport Association.
Jet fuel prices have roughly doubled since the war began. Shortages could start next.
U.S. carriers Delta, United, American Airlines, Southwest Airlines, and JetBlue have all increased checked baggage fees, for example, in recent weeks.
Meanwhile, Hong Kong’s Cathay Pacific recently bumped fuel surcharges by roughly 34% across all routes, while Air India added up to $280 in fees to some flights earlier this month.
Emirates, Lufthansa, and KLM have also adjusted fees or fares to keep pace with the price volatility.
Solange Reyner ✉
Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.
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