Airlines face $100bn extra fuel costs, Iata warns fares will rise

Airlines will have to spend an extra $100bn on jet fuel this year, with fares “inevitably” rising to cover the bill after the war with Iran choked off oil supplies, according to the airlines body Iata. Jet fuel prices are expected to be 70% higher across 2026, and Iata said collective industry profits worldwide would halve to $23bn. Some carriers would struggle to survive the fuel price shock caused by the closure of the Strait of Hormuz in March. Speaking at Iata’s summit in Rio de Janeiro, director general Willie Walsh said high oil prices would inevitably mean higher ticket prices and that the increase in the fuel bill was potentially existential for many airlines. Walsh noted that concerns about possible fuel shortages were now over, and that compared with Covid it was not a crisis, with traffic up 2% and the industry still forecasting growth. Long-haul and business passengers may face the bulk of the fare increases, according to British Airways chief executive Sean Doyle, who said that if fuel goes up, fares have to go up. Iata also warned that the EU’s entry-exit system (EES) could create difficulties for travellers this summer and beyond, with potential long waits at passport control.

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Sources: The Guardian