Air fares have surged by nearly 25% due to the ongoing conflict in the Middle East, with economy tickets now costing an average of 24% more than a year ago, according to new research. Consultancy Teneo’s report attributes this increase to airspace restrictions forcing airlines to reroute flights, leading to higher fuel consumption. Disruptions to oil supplies have also driven up the cost of jet fuel, which has soared from $85-$90 per barrel to $150-$200 in recent weeks, accounting for up to a quarter of airline operating expenses.
The conflict has also led to a significant loss of capacity on long-haul routes typically served by Gulf carriers, whose operations have been heavily disrupted. While some rival airlines have expanded services, overall seat availability remains lower than usual. Routes between Europe and East Asia have seen the most significant impact, with a London to Melbourne flight in June costing 76% more than last year, and Hong Kong to London fares rising by 72%.
Amidst these developments, US President Donald Trump announced an extension of a ceasefire with Iran, pending progress in peace talks. He also stated that the US would maintain a blockade on Iran’s ports until Tehran presents a “unified proposal.”
UK-based airlines are warning of potential flight cuts and further fare increases if the Middle East conflict escalates. They have urged the government to implement measures to mitigate the impact of disruptions, particularly from the closure of the Strait of Hormuz. These demands include classifying delays and cancellations due to fuel shortages as “extraordinary circumstances” to avoid compensation payouts, a move also sought by European airlines. Airlines UK, representing major carriers like EasyJet and British Airways, has also requested cuts or suspension of Air Passenger Duty, a temporary halt to a major emissions trading scheme, eased night flight restrictions, and relaxed rules on airport slot allocation. Furthermore, they propose “targeted refinery obligations” to prioritize jet fuel production and temporarily allowing the import of Jet A fuel, a US-produced variant similar to Europe’s Jet A1 but with a higher freezing point, currently not permitted in the UK.
The Department for Transport stated that UK airlines are not currently experiencing a jet fuel shortage and affirmed ongoing contingency planning with suppliers and international partners. Their priority remains de-escalating the conflict, reopening the Strait, and preventing passenger disruption. Airlines UK, while confirming normal operations and no immediate supply issues, emphasized the need for government action and flexibility to support the aviation industry amidst record-high jet fuel prices and maintain global networks.
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