A new reality is setting in for travelers worldwide: rising fees, fewer flight options, and difficult decisions about whether a trip is worth the cost.
The culprit is volatile oil and jet fuel prices, which have spiked sharply since the war in the Middle East began and fighting near the narrow Strait of Hormuz created a chokepoint for global oil supplies.
“Volatility is the real story here,” said Shye Gilad, a former airline captain who now teaches at Georgetown University’s business school. “Right now, the airlines are trying to make bets on what they think will happen in the future.”
Airlines are responding cautiously, trimming schedules and adjusting prices in ways that experts say will ripple unevenly across the market but ultimately affect nearly every type of traveler.
Budget airlines and the price-conscious customers who rely on them are likely to feel the pinch first and most acutely, experts say, but even travelers in premium cabins won’t escape the higher prices and less convenient schedules.
Oil prices have swung wildly in recent weeks, briefly topping $119 a barrel at one point, plunging Wednesday below $95 on news of a two-week ceasefire that temporarily reopened the Strait of Hormuz, and then climbing back toward $100 on Thursday as uncertainty over the fragile deal grew. Iran again closed the key artery for global oil shipments in response to Israeli strikes Wednesday in Lebanon.
“When prices move quickly in both directions, it’s very hard for airlines to make predictions,” Gilad said. “That’s why there’s a lag between oil market moves and what passengers see in ticket prices.”
In other words, even when oil prices drop, travelers may not see relief right away. Gilad said airlines can take months, sometimes even up to a year, to adjust prices as they wait for energy markets to stabilize.
“At this level of fuel, it’s hard to call anything temporary,” Delta Air Lines CEO Ed Bastian told reporters this week after the Atlanta-based carrier raised its checked baggage fees.
Global squeeze, local effects
Bastian said Wednesday as Delta kicked off the earnings season for U.S. airlines that the higher fuel prices are expected to add $2 billion in operating expenses in the second quarter alone. United Airlines CEO Scott Kirby said in a recent memo to staff that if jet fuel prices stay elevated, it would mean an additional $11 billion in annual costs. That’s more than double what United earned in its most profitable year.
“For perspective,” Kirby wrote, “in United’s best year ever, we made less than $5B.”
According to the International Air Transport Association, the average global jet fuel price rose to $209 per barrel last week, up from roughly $99 at the end of February when the war started.
Travelers from the U.S. to Hong Kong and New Delhi are paying the price.
U.S. carriers are embedding the higher operating costs into ticket prices and add-on fees. Delta, United, Southwest Airlines and JetBlue have all increased their checked baggage fees.
United has moved beyond add-ons to adjust pricing in its front cabins. The carrier said last week it is bringing the “pay for what you want” approach already standard in economy to its premium cabins, turning perks like advanced seat selection and fully refundable tickets into optional extras.
Hong Kong’s Cathay Pacific recently bumped fuel surcharges by roughly 34% across all routes, while Air India on Monday added up to $280 in fees to some flights. Emirates, Lufthansa and KLM have also adjusted fees or fares to keep pace with the price volatility.
Experts say flexibility — and careful monitoring — can help offset the rising fares. Fare-tracking tools can alert travelers to price changes and compare multiple options in one place. Booking early and checking nearby airports can lock in better prices, while refundable tickets make it easier to cancel and rebook if fares drop. Traveling light with just a carry-on can also help avoid the rising bag fees.
Flight cuts to cut costs
For some travelers, it’s not just the cost — it’s the uncertainty that’s changing how they’re planning trips.
Bill Moorehouse, 50, a solutions director at a global provider of business and technology services, routinely travels for work every four to six weeks.
“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,” the Cupertino, California, resident said.
For now, he’s staying closer to home.
“I think it’s a good time to do your spring cleaning and reconnect with friends locally,” Moorehouse said.
Airlines, meanwhile, are also adjusting how much they fly.
BNP Paribas estimates that global schedules for April have been cut roughly 5% compared with earlier plans. Most reductions are in the Middle East, the global investment bank said, though smaller cuts were also emerging in Europe, Asia and North America.
United Airlines is cutting about 5% of its planned flights in the near term, trimming less profitable routes and suspending some international service temporarily rather than “burning cash” on trips that can’t absorb the more expensive fuel costs. The airline’s CEO said the cuts will target redeye flights and routes on historically slower travel days such as Tuesday, Wednesday and Saturday.
Delta is scrapping plans to add more flights and seats in June, leaving about 3.5% fewer seats than originally planned.
Travel plans upended
These moves show why major carriers are better positioned to weather the spike in fuel prices than budget carriers, whose “no frills” model leaves them with less flexibility. Bigger airlines can lean on dynamic pricing, sell more seats at higher fares or swap in larger planes on certain routes, letting them cut flights without losing overall capacity.
“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.
It’s already made the difference for Anna Del Vecchio. The 36-year-old Seattle resident has made it an annual springtime tradition to visit family in Philadelphia before flying to Paris to see friends she met as a teenager during a volunteer internship.
Her credit card points typically cover the roundtrip flight, but ticket prices now hover around $1,400 — about double what she has paid in past years.
“It wasn’t even scratching the surface for the flight this time,” she said, “so I decided to delay the trip.”
But if airfare tops $1,500, she might not be able to make a journey she hasn’t missed in years.
“It might be the kind of thing where it just ends up being that I have to travel less.”
—Rio Yamat, AP Airlines and Travel Writer