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Europe’s biggest airlines have warned that rising fuel prices, fuelled by the war in the Middle East, will inevitably lead to higher airfares and have advised passengers to book as soon as possible.
Although carriers have partially protected kerosene prices, industry leaders say they will not be able to avoid passing on the extra costs to passengers in the long term.
EasyJet CEO Kenton Jarvis said there were no immediate fuel supply issues but warned that fares could rise as protective contracts expire. He urged passengers to book their tickets as soon as possible.
Ryanair chief executive Michael O’Leary echoed the sentiment, playing down the short-term disruption but warning that a long-term rise in fuel prices, if it lasts for six months, could hit the sector hard.
According to IATA, the price of kerosene was 94% higher than the annual average a decade ago, while crude oil prices have risen further due to the escalation of the conflicts.
However, the crisis could also bring some opportunities. European carriers are trying to re-strengthen their global position after losing market share to carriers from the Persian Gulf in recent years.
Lufthansa added 40 flights to Asia to compensate for flights canceled due to the conflicts, while Air France is increasing capacity on Asian and African routes, driven by strong demand.
British Airways announced new direct flights to Melbourne, expanding routes via Kuala Lumpur, and increasing the number of flights to destinations such as the Caribbean, which avoid Middle Eastern airspace.
On the other hand, tourism in Europe could take a hit. Consulting firm Oxford Economics warns that nearly 28 million trips from the Middle East are at risk, with Turkey, France and the UK the worst affected. At the same time, Mediterranean destinations such as Spain, Portugal and Greece could benefit as an alternative choice for passengers who would otherwise head to the Gulf states.
Airlines have called on European leaders to reduce green taxes, warning that European carriers are losing competitiveness to rivals outside the EU, which do not have the same regulatory obligations.
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