finance
Jet Fuel Prices Rise After Strait of Hormuz Closure as Industry Warns of Higher European Air Fares
Willie Walsh, head of the International Air Transport Association, told the BBC that airlines cannot absorb elevated oil costs, making higher ticket prices unavoidable. The closure of the Strait of Hormuz from the conflict in Iran has driven dramatic price increases, with effects likely persisting into next year.
May 13, 7:03 PM·2m read1 source
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Higher ticket prices for air travellers in Europe are inevitable because of the high cost of jet fuel, Willie Walsh, head of the International Air Transport Association, told the BBC. Although some airlines have cut their European fares recently because of a lack of demand, Walsh said there was no way airlines could absorb the extra costs over time.
"There's just no way airlines can absorb the additional costs they're experiencing," he explained.
The increase in fuel prices has already been reflected in the cost of long-haul flights, some of which have seen significant increases. Walsh noted that the disruption to crude oil supplies and damage to refining facilities in the Gulf meant that even if the Strait of Hormuz were to reopen now, fuel prices were unlikely to come down quickly.
The closure of the Strait of Hormuz occurred as a result of the conflict in Iran and has had a dramatic impact on jet fuel prices.
Europe and the UK in particular are usually highly reliant on imports of jet fuel from the Middle East region. Walsh said that even if the Strait of Hormuz were reopened tomorrow, the impact of disruption caused by the conflict in the Middle East could still be felt into next year.
"Whichever way you look at it, I think this issue will continue for a number of months to come, and may indeed continue into next year," Walsh said.
He added that the major problem facing the UK is timing. Flights and fuel requirements normally increase 25% in July and August versus March. Walsh said that if sufficient alternative supply is not sourced, there may be some shortages in the peak summer period for the UK.
