The conflict in Iran has caused widespread flight disruptions throughout the Middle East, stranding thousands of passengers in key hubs like Doha and Dubai. Now, elevated oil prices are leading some international airlines to increase fares, causing many travelers to wonder if they should book upcoming flights now or hold off.
For many airlines, jet fuel is one of their largest expenses. As a result, popular global carriers such as Qantas, Scandinavian Airlines, and Air New Zealand have increased their airfares this week to help cover costs. While US airlines have not yet announced similar ticket hikes, US flight prices will need to rise by at least 11% to cover the current increase in jet fuel expenses, according to new analysis by Skift Research—meaning American travelers may soon see higher fares too.
It’s not clear whether oil prices will continue to drop back to normal, and experts say the market is likely to remain volatile. “The key thing for us to understand is that the situation remains uncertain and fluid,” Volodymyr Bilotkach, associate professor at Purdue University’s School of Aviation and Transportation Technology, tells Condé Nast Traveler in an email. “Things can change at any time without much of a warning.”
Why long-haul flights could get more expensive
Travelers may not notice a spike in average ticket prices right away. That’s because airlines create their flight schedules and sell fares many months in advance, and that system doesn’t pivot very fast, Mike Arnot, an airline industry analyst, explains. However, fuel surcharges, which are extra fees added to base fares at the time of purchase, are a tried-and-true way for carriers to raise prices on short notice.
Fuel surcharge fees can be as much as 5 to 10% of the airfare, according to estimates from Arnot. Surcharges to cover rising fuel costs can’t be added retroactively to existing bookings—so travelers who have purchased their airfares shouldn’t worry about getting hit with extra fees. “If you’ve already bought a ticket for a flight later this spring or summer, you’re in a good spot, at least when it comes to airfare,” Arnot says.
“However, the airlines can quickly add fuel surcharges to new bookings and that is likely to follow especially on long-haul flights, if there is continued increases in jet fuel prices,” he adds. “It could also be added to domestic flights as well.”
Even if oil costs return to normal, the conflict in Iran could drive up airfare in other ways—especially as we head into peak summer travel months and airline seat capacity starts to dwindle. While major international carriers continue to cancel flights that transit through hubs like Dubai and Doha there will be fewer long-haul routes available, potentially leading to fuller planes and more expensive tickets.
Many passengers “rely on the Middle East hubs to connect to Asia and Australia, and so when those hubs are constrained, people look for alternative connect points, such as in Europe,” explains Arnot.
At the same time, widespread cancellations mean many customers will be rebooked on alternate flights, leading to “more demand for precious seats,” Arnot says. “The airlines generally can’t simply snap their fingers and bring capacity from Chicago or London to Tokyo or Sydney at will. More demand for seats and less supply of seats means fares will rise.”
Will flight costs in the US increase?
Although US airlines haven’t begun hiking their airfares yet, that could change in the coming days. United Airlines CEO Scott Kirby said last week that raising airfares due to more expensive fuel prices would “probably start quick,” CNBC reported on March 6.
