The escalating conflict in the Middle East will “inevitably” drive up ticket prices for short-haul flights from the UK to popular Mediterranean holiday destinations, experts have told The i Paper.
Some of the world’s biggest airlines have already unveiled plans to increase their prices as the war ramps up the cost of jet fuel.
Hong Kong aviation giant Cathay Pacific announced an emergency fuel surcharge on Thursday, effectively doubling it on most of its routes. It joined Australia’s Qantas Airways, Scandinavia’s SAS, and Thai Airways, which have all unveiled price rises since the war broke out on 28 February.
Oil prices shot up again on Thursday after Iraqi security officials said Iranian explosive-laden boats struck two oil tankers off Iraq’s southern coast.
Iran has warned the world should be ready for oil at $200 (£150) a barrel.
Air New Zealand said on Thursday it would cut 5 per cent of its flights – around 1,100 services – through early May due to the increase in costs and travel disruption sparked by the war.
While airlines use hedging contracts to cap the cost of future jet fuel purchases, protecting them against sudden price rises, one aviation expert said it is “very possible” a persistent increase in oil prices will hit passengers’ pockets “everywhere”.
Saj Ahmad, chief analyst at StrategicAero Research, told The i Paper: “Already airlines like Air New Zealand have cut flights on the back of the uncertainty – if an airline that far away from the Middle East can be affected, then so too can European airlines – and not every airline will have hedged their fuel bills.
“If this war continues beyond March, then I do see EU airlines starting to hike fares across the board in advance of the summer season to popular destinations as demand gravitates away from the Middle East.”
Ahmad said the “sheer uncertainty as to when the war ends, as well as Iran’s ability to stifle the Strait of Hormuz, is driving up costs”.
He added that “oil price volatility isn’t helping and the higher pricing we see now will only continue to rise as the war drags on”.
The remarks were backed by Richard Vilton, chief executive of Emu Analytics, which develops intelligence software for airports, airlines, and airspace regulators.
He said: “Even when disruption happens far from the UK, changes to available airspace can ripple through airline networks. If airlines need to reroute flights to avoid certain regions, it can increase flight times and reduce the flexibility they have to keep aircraft and crews running exactly to schedule.
“For short-haul leisure routes to destinations like Greece and Spain, the impact is often indirect. Airlines may adjust schedules, add small buffers, or redeploy aircraft across their network to maintain reliability.
“We know from our customers that airlines are investing significant time and resources to minimise disruption and reduce the inconvenience to passengers.”
John Grant, chief analyst at the aviation analytics firm OAG, said: “It’s inevitable that prices will rise in line with the price of oil regardless of where the flight is operating.”
Skyscanner’s travel expert Laura Lindsay told The i Paper that “we may see some carriers increase fares to offset increased costs” in fuel, but she added that “most airlines will do everything they can to price attractively to stay ahead of the competition”.
Ryanair chief executive Michael O’Leary said the company’s hedged contracts means rising oil prices “won’t affect our low fares”.
“We’re hedged for the next 12 months out to March 2027 at about $67 per barrel,” he said “So it won’t affect our costs and it won’t affect our low fares.”
James Noel-Beswick, head of commodities at the market intelligence firm Sparta Commodities, said holidaymakers could expect to see the issue hit prices in the coming weeks and months.
“If it goes on beyond – let’s say three or four weeks – then that picture for European holiday costs really rapidly changes,” he told The i Paper this week, predicting “a 30, 40, 50 per cent addition” to the cost of tickets this summer.