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Recent escalation of conflict in the Middle East has led to a notable increase in airfares, with economy class tickets now averaging 24% higher compared to the same period last year. This rise is linked closely to new research from consultancy firm Teneo, which highlights the impact of restricted airspace due to the ongoing war. Airlines have had to alter their flight paths, consuming more fuel as a result, contributing significantly to the price hike.
Fuel costs themselves are another critical factor in the rising ticket prices. Disruptions to oil supplies caused by the war have caused jet fuel prices to soar dramatically from around $85-$90 per barrel up to a range of $150-$200 per barrel in recent weeks. Since fuel expenses can constitute up to 25% of an airline’s operational costs, these increases heavily affect ticket pricing. Moreover, the report points out that Gulf carriers, which typically provide many long-haul services, have experienced major operational disruptions, reducing seat availability and pushing rival airlines to expand their services, though not enough to meet usual capacity.
The most significant ticket price inflation has been observed on flights linking Europe with East Asia. For instance, a London to Melbourne flight in June now costs 76% more than it did the previous year, and similarly, the price from Hong Kong to London is up by 72%. Meanwhile, airlines based in the UK have issued warnings that further worsening of the conflict could force reductions in flights and additional fare increases. They have urged the government to implement measures that would protect airlines from the operational challenges stemming from the closure of the Strait of Hormuz, a key route impacted by the hostilities.
Among their requests are the classification of delays and cancellations caused by fuel shortages as “extraordinary circumstances,” which would exempt airlines from compensating passengers under such conditions. However, sources indicate that this particular plea is unlikely to gain serious government consideration. Airlines UK, representing carriers such as EasyJet, Ryanair, British Airways, and Virgin Atlantic, has also called for a temporary suspension or reduction of Air Passenger Duty and emissions trading schemes, easing of night flight restrictions, and more flexible regulations regarding take-off and landing slots to avoid losing valuable slots during service disruptions. The briefing also suggests targeted refinery obligations that would require refineries to prioritize jet fuel production if necessary, and proposes allowing the temporary import and use of Jet A fuel from the United States, despite it having a higher freezing point than the European Jet A1 variant currently permitted in the UK.
The Department for Transport responded by stating there is currently no shortage of jet fuel in the UK and emphasized ongoing collaboration with fuel suppliers, airlines, and international partners to maintain operations amid the conflict. Airlines UK echoed the need for government action to secure continuous supply and provide flexibility to help the aviation sector cope with record-high fuel prices and operational challenges. They stressed that such measures would be essential to minimizing passenger disruption and sustaining international air connections
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