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

The head of the International Air Transport Association has asserted that an increase in ticket prices for air travelers in Europe is "inevitable" due to the rising costs of jet fuel.

While some airlines have recently reduced their fares in Europe amid decreased demand, Willie Walsh emphasized that the airlines would ultimately be unable to absorb the higher costs in the long term.

In conversation with the BBC, he expressed concerns regarding potential fuel shortages within the UK aviation sector over the summer months, although he reassured that there is currently no cause for alarm.

Despite this, Walsh highlighted that even if the Strait of Hormuz were to reopen immediately, the repercussions from the ongoing disruption in the Middle East will likely persist into the next year.

Willie Walsh represents the interests of the airline industry, where the issue of jet fuel prices remains a pressing concern.

A government spokesperson clarified that UK airlines have stated they are not currently experiencing a shortage of jet fuel.

The conflict in Iran has resulted in the closure of the Strait of Hormuz, which has significantly affected jet fuel prices while raising concerns about potential shortages in the upcoming months.

Both Europe, particularly the UK, heavily depend on imports from this region and have been actively seeking alternative sources for fuel.

Last week, the EU indicated that there were no regulatory obstacles preventing European airlines from utilizing US-grade jet fuel, provided that the integration was conducted with due diligence.

On Wednesday, Dan Jorgensen, the EU's energy commissioner, conveyed that he does not foresee a major shortage in the immediate future but could not discount the possibility of supply challenges over a longer horizon.

Sebastien Ebel, the chief executive of travel operator Tui, also expressed that he does not anticipate shortages in the near term.

Nevertheless, Walsh maintained that apprehensions remain for UK operators.

"The significant challenge for the UK relates to timing," he explained. "Typically, you would expect a 25% increase in flights and fuel requirements during the months of July and August compared to March."

He noted concerns that insufficient alternative supply could lead to shortages as the peak summer travel season approaches.

Despite these warnings, he reassured that there is no reason for panic, asserting that widespread flight cancellations could be averted.

Some significant ticket price hikes

The escalation in fuel prices has already been manifested in the rising costs of long-haul flights, many of which have experienced substantial price increases.

However, airline executives have pointed out that some ticket prices in Europe have decreased as carriers are implementing discounts in a bid to encourage hesitant travelers to book flights.

Walsh, however, cautioned that such promotional prices will not be sustainable.

"There is simply no way for airlines to absorb these additional costs over time," he explained.

"There may be instances where airlines offer discounts to stimulate traffic, but in the long run, it is unavoidable that the high cost of oil will lead to elevated ticket prices."

He further remarked that ongoing disruptions to crude oil supplies and damage to refining facilities in the Gulf indicate that even if the Strait of Hormuz reopens, a decline in fuel prices will not emerge swiftly.

"In any perspective, this issue is likely to persist for numerous months and may very well extend into next year," he stated.

A government spokesperson added that fuel suppliers maintain "stocks of bunkered fuel to ensure resilience" and that the government is collaborating with the aviation sector to sustain flight operations while also consulting on "strategies to assist airlines in planning realistic flight schedules that minimize last-minute disruptions and safeguard holidays."