Travelers are facing higher costs and fewer flight options as jet fuel prices swing sharply amid the Middle East conflict, an Associated Press report said. Airlines have responded cautiously by trimming schedules and adjusting prices, according to the report, while executives warned that even falling fuel prices may not translate quickly into relief for consumers.
The pressure traces to volatile oil and jet fuel markets, with fighting near the Strait of Hormuz creating a chokepoint for global oil supplies. The report said oil prices briefly topped $119 a barrel at one point, fell to below $95 on news of a two-week ceasefire that temporarily reopened the strait, and later climbed back toward $100 as uncertainty over the fragile deal grew. Iran later closed the key shipping artery again in response to Israeli strikes in Lebanon, the report said.
Shye Gilad, a former airline captain who now teaches at Georgetown University’s business school, said the volatility itself has become the main issue. “Volatility is the real story here,” Gilad said, adding that airlines are trying to “make bets on what they think will happen in the future” as they respond to fuel-price swings.
Airlines, the report said, are embedding higher operating costs into both ticket prices and add-on charges. It cited executives at Delta, which raised its checked baggage fees as it began the U.S. airline earnings season, and it said Delta CEO Ed Bastian told reporters that at current fuel levels it is hard to treat changes as temporary: “At this level of fuel, it’s hard to call anything temporary.”
United CEO Scott Kirby also said fuel costs could add substantially to expenses if they stay elevated. The report said Kirby wrote to staff that the increases could add $11 billion in annual costs, and noted that in United’s “best year ever” the airline made less than $5 billion. The AP report said BNP Paribas estimates global schedules for April have been cut about 5% compared with earlier plans, with most reductions in the Middle East but smaller cuts emerging in other regions.
Changes are starting to show up in a range of pricing models. The report said Delta, United, American Airlines, Southwest Airlines and JetBlue have all increased checked baggage fees. It also said United is moving beyond bag charges, applying a “pay for what you want” approach already standard in economy to its premium cabins, making perks such as advanced seat selection and fully refundable tickets optional extras.
American Airlines has also announced adjustments, including that passengers in basic economy will have to pay extra to pick their seat beginning May 18, the report said, including for elite-tier loyalty members. The report added that later this year American said it will assign basic economy passengers without elite status or an eligible co-branded credit card to boarding Group 7, while those with higher status will still board earlier even when buying the lowest fare.
Outside the U.S., airlines have made similar moves to manage fluctuating costs. The AP report said Hong Kong’s Cathay Pacific bumped fuel surcharges by about 34% across all routes, and that Air India on Monday added up to $280 in fees to some flights. It also cited adjustments by Emirates, Lufthansa and KLM to keep pace with fuel-price volatility.
Experts told the AP that flexibility and careful planning can help travelers offset some of the increases, even if they do not eliminate them. The report said fare-tracking sites can alert travelers to changes and help compare multiple options, and that booking early, checking nearby airports and choosing refundable tickets may allow easier rebooking if prices drop. It also said traveling light with a carry-on can avoid some of the higher bag fees.
For business travelers, the report said the uncertainty is already affecting decisions. Bill Moorehouse, a solutions director who flies for work every four to six weeks, told the AP that uncertainty may keep him closer to home because disruptions feel more likely: “When you have business trips and you have a carefully coordinated schedule, you don’t want unknowns and disruptions. And right now, it just feels like it’s more likely that things could go wrong and throw your trip off course.” Richard Groberg, an investment banker from Las Vegas who visits clients around the U.S., said he plans to book as early as possible to lock in fares and that he sometimes thinks about whether driving would be a cheaper alternative as travel becomes more expensive.
The report also described changes to how much airlines fly, with BNP Paribas estimating global schedule cuts and carriers making targeted reductions to manage expected fuel costs. It said United is cutting about 5% of planned flights in the near term, trimming less profitable routes and suspending some international service temporarily rather than “burning cash” on trips that cannot absorb higher fuel costs. Delta, the report said, is scrapping plans to add more flights and seats in June, leaving about 3.5% fewer seats than originally planned.
Gilad said leisure travelers and budget-conscious customers are likely to feel the effects first. “Leisure travelers and budget conscious travelers are going to absolutely feel it first because it may make the difference between going and not going,” Gilad said. The report described at least one traveler, Anna Del Vecchio, who said her credit card points usually cover the cost of a roundtrip flight, but that current ticket prices have increased to hover around $1,400 for a trip to Paris from Seattle—about double what she said she has paid in past years—leading her to delay the trip and reconsider whether she can afford future travel.