Jet fuel: The other energy crisis hitting your wallet

The fuel crisis sparked by the war in Iran has reached the airline industry, said Will Gottsegen in The Atlantic. In addition to oil and gas, much of the world’s supply of kerosene—the base product for jet fuel—passes through the Strait of Hormuz. But with the waterway effectively closed since early March, jet fuel prices have soared by more than 58%. Airlines, “which have always had razor-thin margins,” immediately felt the strain. They have already needed to reroute many flight paths away from the war-torn Middle East, “using up more fuel and putting more pressure on airlines to compensate elsewhere.” Travelers are now seeing the turmoil show up in their ticket prices. United Airlines chief executive Scott Kirby this week warned fliers to book their “summer travel as soon as possible, before prices go even higher.”

The jet fuel crisis is so dire that “airlines are drawing up plans to cancel flights” if the war drags on, said Christopher Jasper in The Telegraph (U.K.). There is particular concern about the ability for some planes to refuel after long-haul flights to southeast Asia, a major Gulf oil importer, “potentially leaving aircraft stranded” at far-flung locales. “Because no one has a crystal ball, what this all means for travelers is up in the air,” said Aarian Marshall in Wired. But if the war continues for weeks or even months, “bigger changes—and inconveniences—might be headed to an airline near you.” Carriers could raise ticket prices, eliminate less profitable routes, or experiment with new fees—as they did during 2008’s “major and sustained” fuel shock, when charging passengers for luggage became the norm.

Wondering about the war’s impact on vacations “might seem distasteful,” said Andrea Felsted in Bloomberg. But it’s a serious problem for the tourism industry, which was “already at risk from a slowdown following the post-Covid travel boom.” Certain tourist spots like Dubai, the fifth-most visited travel destination last year, are a no-go now with the war happening. Another important global tourist spot, Mexico, is simultaneously witnessing “a wave of violence” following the killing of a Jalisco cartel leader, which will undoubtedly give travelers more pause. “While the super-wealthy will continue to travel, the simply comfortable might vacation closer to home, or not at all, particularly if the cost of energy deepens the cost-of-living crisis.”

The travel industry’s problems run deeper than the cost of jet fuel, said Ganesh Sitaraman in The New York Times. In recent weeks, travelers have endured thousands of canceled flights, hours-long lines at TSA checkpoints, and multiple safety crises, including a tragic crash at LaGuardia Airport. “Flying hasn’t always been like this,” and the culprit for America’s mess in the skies is deregulation. The Airline Deregulation Act of 1978 eliminated route and price regulation, setting the stage for the current era of “fortress hubs dominated by just one airline” at the
expense of smaller communities, as well as the relentless cost cutting that has made flying miserable. “Politicians need to learn the lessons of hundreds of years of infrastructure policy” and embrace “a regulatory and industrial policy that will once again make our air transportation system the envy of the world.”