Airlines Signal Summer Fare Increases as Fuel Costs Rise
easyJet has warned that summer holiday prices could rise, urging people to book sooner rather than later. Chief executive Kenton Jarvis said fares are likely to increase as fuel costs climb, linked to the ongoing Iran conflict. He noted that airlines cannot absorb higher costs indefinitely, especially when margins remain tight, with profits averaging around £7 per seat.
Right now, many UK airlines are partly shielded by fuel hedging, which lets them fix fuel prices for a limited period instead of paying market rates. This is keeping fares relatively stable for the time being, even as costs rise elsewhere. However, if the situation in the Strait of Hormuz continues or worsens, airlines will likely raise ticket prices in the coming months as fuel becomes more expensive.
“My expectation is that prices go up. The industry has no choice. We make about £7 a seat and if fuel goes up by £10 then you do something about that."
Other industry figures have echoed similar views. Ryanair’s Michael O’Leary said disruption is unlikely if the conflict ends within the next one or two months. Willie Walsh, director general of IATA, said fare increases on North Atlantic routes are expected, noting that price changes by US carriers often influence competitors in Europe due to market competition.
Several airlines have already started adjusting fares or signalled plans to do so. AirAsia has introduced temporary increases, while Thai Airways expects ticket prices to rise by 10 to 15 per cent. Qantas has indicated that changes will depend on routes. SAS has applied a temporary adjustment, and Air New Zealand has raised fares across domestic, short-haul and long-haul services.
Rising ticket prices are changing how summer trips are planned, particularly during peak travel periods. More people are booking earlier instead of waiting, as fares usually rise closer to departure dates. Prices have not increased across all routes yet, but some routes are already seeing changes, and the next few weeks will show how far fare increases spread.
