Prices for flights will shoot up again if fuel costs stay high, the chief of British Airways has warned.
The airline’s chief executive, Sean Doyle, said there is “no getting away from” the fact that “if fuel goes up, fares have to go up.”
Since the Iran war began in February, jet fuel prices have soared. Despite ceasefire talks, the Strait of Hormuz – which supplies around 40 per cent of Europe’s jet fuel – remains closed.
Following BA's warning of a possible increase in prices last month to offset the increase in fuel costs, in particular affecting business class fares, Doyle said the airline expects to raise prices further if fuel costs do not decrease, he told the Financial Times.
Jet fuel, which is usually more expensive than oil, now costs $1,710 a metric tonne, up over 130 per cent from its $742 price tag last year.
However, long-haul services will be impacted more than short-haul.
“A brand like BA, which has got a lot of long-haul, a lot of corporate, a lot of premium, we’d expect maybe to have more pass-through of prices than maybe a carrier who’s solely competing for leisure short-haul,” Doyle said.
Doyle said the airline is also planning to resume flights to the Gulf in the next few months, which it had paused after the war began.
However, flights to Dubai will not resume until October or later.
“Dubai was always our biggest winter destination. It will come back… whether it takes a year or two.,” Doyle said.
Fuel crisis fallout for airlines
In the last few months, airlines have been under huge strain in the wake of the Iran war, causing fuel costs to surge and, as a result, ticket prices to be hiked and many flights cancelled.
In March, airlines that confirmed flight cancellations include Air New Zealand, which cut 1,100 flights through to early May, and Scandinavian group SAS, which is cancelling 1,000 next month. Both have said these will mainly affect domestic routes.
Ryanair’s finance boss said last month he “wouldn’t be surprised” if many of the airline's rivals went bust later this year as the Iran war spikes fuel costs.
By City AM
