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Middle East tensions lift jet fuel and airline fares, Virgin warns
Virgin Atlantic said jet fuel surcharges are required at current fuel-price levels, after Europe benchmark jet fuel peaked above $1,800 a tonne and was around $1,450 more recently.
Virgin Group founder Sir Richard Branson blamed flight price rises on Middle East tensions that have disrupted oil production and transportation, lifting the cost of car and jet fuels. BBC Business reports Branson linked the higher fuel costs to inflation after the conflict involving Iran began.
The European benchmark jet fuel price had been hovering around $800 a tonne before spiking to more than $1,800 in April, before later easing to about $1,450, according to the outlet. Virgin Atlantic chief executive Corneel Koster said fuel surcharges were absolutely required at the current level.
Koster told BBC that the airline was not planning major changes to its winter schedule, though some capacity trimming could occur if demand weakens during the deepest part of winter. BBC Business also noted Virgin introduced surcharges that added £50 to economy class fares, £180 to premium, and £360 to business class.
Other airlines have responded as well, with consultancy analysis cited by BBC Business showing the Iran war contributed to a 25% increase in air fares in April. The outlet said Ryanair warned it may cut its winter schedule due to higher fuel prices and cautioned that European short-haul fares could increase materially if jet fuel stays elevated into next summer.