How the Iran War Is Hurting Travelers, Airline Industry

The ongoing conflict involving Iran and the United States has sent shockwaves through the global aviation sector, with jet fuel prices more than doubling since February. This dramatic increase, directly linked to the disruption of the Strait of Hormuz—a vital artery for a fifth of the world's oil and gas shipments—poses a severe threat to airlines worldwide. As reported by Tempo, the price surge from approximately €68.27 to €153.84 per barrel in Europe highlights the precariousness of the industry, where fuel costs constitute a significant portion of operating expenses.

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If fuel prices, which represent 25% to 50% of an airline's total operating expenses, remain high and airlines have not hedged, they could go bankrupt

Experts warn that if these high fuel prices persist and airlines have not hedged against such volatility, bankruptcies could become a grim reality. The situation is further exacerbated by the looming threat of a jet fuel shortage in Europe, which relies heavily on Middle Eastern supplies via the now largely impassable Strait of Hormuz. This precarious supply chain situation means that travelers should brace themselves for fewer flights, higher airfares, and a general reduction in available seats as airlines scramble to adapt.

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We are obliged to do so, because otherwise we just are bankrupt in a few months

In response to this crisis, airlines are implementing drastic measures. Air France-KLM has reportedly introduced a surcharge on long-haul flights, while Lufthansa is cutting thousands of short-distance flights. Scandinavian Airlines is also canceling flights. Sebastien Justum of Air France-KLM stated that these actions are necessary for survival, underscoring the dire financial straits the industry is in. The ripple effect is already being felt, with airfare prices reportedly increasing by 24% over the year, according to Teneo.

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That uncertainty, and the extra cost of keeping the tanks full, is making tickets more expensive

From our perspective, the impact of this conflict on global connectivity is profound. The airline industry, a critical enabler of international trade and tourism, is being severely tested. Airlines for Europe (A4E) has urgently called on the EU to implement temporary measures, such as relaxing obligations under anti-tankering legislation and suspending the Emissions Trading System. These calls for regulatory flexibility are not merely requests for convenience but essential steps to ensure the industry's survival through this turbulent period and to plan for a more resilient future.

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These are temporary measures to weather us through the current situation, plus more long-term planning to be prepared for the future